Aalto University
School of Science
Reetta Koivuniemi
What it takes to become an entrepreneurial
leader?
Master’s Thesis
Helsinki, May 23, 2016
Supervisor:
Professor Matti Vartiainen
Thesis advisor:
Tapio Peltonen, M.Soc.Sc, MBA
Abstract of master's thesis
Author Reetta Koivuniemi
Title of thesis What it takes to become an entrepreneurial leader?
Master’s programme Degree programme in Chemical Technology
Thesis supervisor
Matti Vartiainen
Major or Minor/Code TU-53
Department Deparment of Industrial Engineering and Management
Thesis advisor(s) Tapio Peltonen, MBA, M.Soc.Sc,
Date 23.5.2016
Number of pages 5 + 92
Language English
Abstract
Entrepreneurship is seen as the answer to cope in the world of uncertainty, where rapid changes,
growing global competition and unpredictable future require new ways of thinking and doing
business. Also larger organizations need to become more entrepreneurial in order to enhance
their performance, their ability for adaptation, and long-term survival.
This study was conducted as a part of the Entrepreneurship Exchange -program. The aim was to
understand what is entrepreneurial leadership and how it can be developed during the EEX
program, where high-potential leaders from large corporations are deployed into startup
companies as advisors, to help entrepreneurs and to learn about entrepreneurship.
The research questions addressed participants’ expectations, changes in perceptions of
entrepreneurship and leadership, and critical experiences during the program. The data consist
of literature review and eight deeper reflective interviews. Methodologically critical incident –
technique was used to unearth participants’ key experiences and learning.
The results indicate that participants were well-motivated, and their understanding of
entrepreneurship and startup life was deepened. Though it was not possible to identify learning
outcomes in terms of particular skills, four strong themes arose from the interview data: working
with limited resources, finding vision and direction in startup context – importance of practical
strategy; the ambiguity of the advisory board work; and supporting entrepreneurs’ leadership
development. In addition, an emerging framework of entrepreneurial leadership is introduced.
As a conclusion it is suggested that it is possible to develop entrepreneurial leaders and this
should enhance future possibilities for cooperation especially between large corporations and
startups.
Keywords entrepreneurship, leadership development, learning, critical incidents
I
Diplomityön tiivistelmä
Tekijä Reetta Koivuniemi
Työn nimi Mitä vaaditaan yrittäjämäiseen johtajuuteen?
Koulutusohjelma Kemian tekniikan koulutusohjelma
Valvoja Matti Vartiainen
Pää tai sivuaine/koodi TU-53
Työn ohjaaja(t) Tapio Peltonen MBA, VTM
Päivämäärä 23.5.2016
Sivumäärä 5 + 92
Kieli englanti
Tiivistelmä
Yrittäjyys nähdään mahdollisuutena selviytyä maailmassa, jossa epävarmuus, nopeat muutokset,
kasvava globaali kilpailu ja arvaamaton tulevaisuus edellyttävät uutta ajattelua ja uusia
menetelmiä liiketoiminnassa. Myös suuremmat organisaatiot tarvitsevat yrittäjämäistä
asennetta parantaakseen suorituskykyään, kykyään sopeutua nopeammin sekä selviytyäkseen
pitkällä aikavälillä.
Tämä tutkimus tehtiin osana Entrepreneurship Exchange -ohjelmaa. Työn tavoitteena oli
ymmärtää, mitä yrittäjämäinen johtajuus on ja miten sitä voidaan kehittää EEX-ohjelmassa.
Kyseissä ohjelmassa suuryritysten johtajat tukevat startup-yrityksiä neuvonantajina, auttavat
yrittäjiä ja samalla oppivat itse yrittäjyydestä ja startup-maailmasta.
Tutkimuskysymykset käsittelivät osallistujien odotuksia, sitä miten käsitykset yrittäjyydestä ja
johtajuudesta muuttuivat, sekä osallistujien keskeisiä kokemuksia ohjelman aikana. Työn aineisto
koostui kirjallisuuskatsauksesta ja kahdeksasta reflektiivisestä haastattelusta, joissa
tutkimismetodina käytettiin kriittisen tapahtuman -tekniikkaa syventämään ymmärrystä
osallistujien keskeisistä kokemuksia ja kehittymisestä.
Tulokset osoittavat, että osallistujat olivat lähtökohtaisesti hyvin motivoituneita, ja ohjelman
aikana ymmärrys yrittäjyydestä ja startup-maailmasta syventyi. Vaikka ei ollut mahdollista
tunnistaa yksittäisten taitojen oppimista, neljä vahvaa oppimisen teemaa ja mahdollisuutta
nousivat haastatteluaineistosta seuraavasti: työskentely rajallisten resurssien vallitessa, startupin
suunnan ja vision määrittely – käytännön strategiatyö, advisory board työskentelyn haastava
moniulotteisuus sekä yrittäjien johtajuuden kehittämisen tukeminen. Tämän lisäksi esitellään
yrittäjämäisen johtajuuden viitekehys.
Täten yrittäjämäisen johtajuuden kehittäminen on mahdollista ja sen myötä avautunee
mahdollisuuksia uudenlaiseen yhteistyöhön erityisesti suurten ja startup -yritysten välillä.
Avainsanat yrittäjyys, johtajuuden kehittäminen, oppiminen, kriittinen tapahtuma
II
Acknowledgements:
I did it! It was quite a journey and a challenge but extremely fascinating! I feel
privileged to had the chance to work with such an interesting topic in such an
interesting project. This journey has been worth of every cognitive bruise and tear,
even though I had my moments of doubts. However, this would not have been
possible without all the support I have received.
First of all, I want to cheer to my advisor, Tapio Peltonen, this would not have been
possible without your guidance, feedback, dedication, enthusiasm and patience.
Without you and the EEX team, I would probably be still working with the topic of
my thesis. I think I owe you a glass of sparkling – or two! I also want to thank my
professor, Matti Vartiainen, your guidance, advice and interesting discussions.
And of course, participants and entrepreneurs of EEX, as well as the steering
group, I appreciate the time and effort you have given to me.
All of you - friends, family and warriors, your support, energy and advice means a
lot – I am grateful to have such amazing people around me. Especially, thank you
Minna, those late nigh laundry shows were truly valuable and needed. And
Tuomas, thank you for being there just as you are – you made me laugh and
reminded me, what is important when I had my moments of doubts, plus your
smoothie making skills were highly appreciated! Love and hugs to you all!
Now it is time for new adventures.
Helsinki, May 2016
Reetta Koivuniemi
III
Table of Content
Introduction........................................................................................................................ 1
1.1 Entrepreneurial leadership interest ............................................................................. 1
1.2 Context of the study ..................................................................................................... 2
1.3 Research problem and objectives ................................................................................. 3
1.4 Structure of the thesis .................................................................................................. 4
2 Theoretical background of the study ............................................................................. 5
2.1 Development of entrepreneurial leadership ............................................................. 5
2.1.1. Definitions ............................................................................................................ 6
2.1.2. From the perspective of entrepreneurship .......................................................... 8
2.1.3. From the perspective of leadership ..................................................................... 9
2.1.4. Different frameworks and models of entrepreneurial leadership ..................... 13
2.2. Entrepreneurial leader – attributes, features e.g. ................................................... 16
2.2.1. Innovativeness .................................................................................................... 16
2.2.2. Proactivity ........................................................................................................... 17
2.2.3. Risk-taking .......................................................................................................... 18
2.2.4. Vision and strategy ............................................................................................. 19
2.2.5. Decision-making ................................................................................................. 21
2.2.6. Building a team ................................................................................................... 22
2.2.7. Leading yourself and influencing others ............................................................ 24
2.3. Learning in entrepreneurial context ........................................................................ 25
2.3.1. Different levels of learning ................................................................................. 26
2.3.2. Definition for critical incident ............................................................................. 27
2.3.3. Reflection and critical incidents ......................................................................... 28
2.3.4. Learning in entrepreneurial context .................................................................. 29
2.4. Framework of the study ........................................................................................... 30
2.4.1. What is entrepreneurial leadership?.................................................................. 30
2.4.2. Synthesis - learning entrepreneurial leadership ................................................ 33
3
Research design and methods ................................................................................ 35
3.1. Methodology.............................................................................................................. 35
3.2. Entrepreneurship Exchange program – description .................................................. 36
3.3. Data collection ........................................................................................................... 39
3.3.1. Supplementary material ..................................................................................... 39
3.3.2. Interviews - critical incident technique .............................................................. 41
3.4. Data analysis .............................................................................................................. 42
IV
4
Results ...................................................................................................................... 45
4.1. Motivations and expectations of corporate employees ............................................ 45
4.2. Perceptions of entrepreneurship and leadership ...................................................... 46
4.3. Critical learning experiences ...................................................................................... 49
4.3.1. Working with limited resources ......................................................................... 49
4.3.2. Strategizing in startup context ........................................................................... 52
4.3.3. Ambiguity of the Advisory Board work .............................................................. 54
4.3.4. Supporting leadership development of the entrepreneurs ............................... 58
5
Discussion and conclusion....................................................................................... 61
5.1. Becoming an entrepreneurial leader ......................................................................... 61
5.1.1. Implications for theory ................................................................................... 61
5.1.2. Implications for practice ................................................................................ 64
5.1.3. Recommendations for the EEX program ........................................................ 66
5.2. Evaluation and limitations of study ........................................................................... 67
5.3. Conclusions and future research ............................................................................... 70
References ........................................................................................................................ 73
Appendix 1. The themes of interviews ............................................................................. 80
Appendix 2. Case descriptions .......................................................................................... 82
Case 1. NI – rearranging the way, how AB works......................................................... 82
Case 2. JU – the courage of entrepreneurs .................................................................. 83
Case 3. PU – in order to learn, one has to experience ................................................. 84
Case 4. IA – how to help more effectively Finnish entrepreneurs .............................. 85
Case 5. MV – experiencing new business field ............................................................. 86
Case 6. PA – broaden perspective to one’s own work ................................................. 87
Case 7. UH – Innovativeness requires co-operation and small and agile units............ 89
Case 8. ME – focusing on the right things .................................................................... 90
V
Introduction
1.1 Entrepreneurial leadership interest
Entrepreneurial leadership is relatively new trend in leadership studies, and during
the 21th century it has become increasingly interesting among many researchers
(Kuratko 2007, Greenberg, McKone-Sweet et al. 2011, Johnson 2001, Karol 2015).
It is a fact that our world has undergone great changes both in economy and
technology since the millennium. These changes and unpredictable future
requires new ways of thinking and doing business. The characteristics of
entrepreneurial activity, which have been factors of success in entrepreneurial
firms and small companies are now considered to be vital also for large
international corporations (Fernald Jr, Solomon et al. 2005).
In the future organization’s characteristics should reflect entrepreneurial mindset.
According to some research of entrepreneurial behavior in establish firms (also
known as corporate venturing, intrapreneurship or corporate entrepreneurship)
is linked to superior performance (Zahra, Covin 1995) and that this superior
performance is sustainable (Wiklund 2006) Hence, several scholars suggest that
organizations must become more entrepreneurial in order to enhance their
performance, their capacity for adaptation, and long-term survival (Gupta,
MacMillan et al. 2004). This transformation includes e.g. organization’s strategic
renewal, seeking new opportunities and expanding the scope of operations to new
business areas (Turner, Pennington III 2015, Gupta, MacMillan et al. 2004).
Throughout this thesis project I have had an open and genuine interest to
understand, how more entrepreneurial thinking and action can be added to our
organizations – because that is obviously needed. As a devoted leadership and
organizational development student, I highlight the roles of leaders in every
adjustment and change in organizations. Thus, it is easy for me to agree on
Middlebrooks’ words (2015 p. 27)
1
“…leaders want to be like entrepreneurs—displaying a distinctive set of
knowledge, skills, and dispositions that maximize innovation, continuous energy
and improvement, seeing and pursuing opportunity, and many others that would
be highly desirable in a leader in any field or context.”
1.2 Context of the study
This thesis was conducted as a part of Entrepreneurship Exchange (EEX) –
program, which is a new form of collaboration between startups and large
corporations. At the time of this study, the program was arranged second time.
The idea in EEX program was to bring large corporations’ key talent leaders
together with startup entrepreneurs. Hence, the main goal of EEX is two folded,
first, help and accelerate startups growth providing high talented advisors and
their knowledge to startups’ use, and second, to develop leaders with more
entrepreneurial mindset. This form of collaboration is new, unique and important.
As far as I know it was also first and one of its kind in the world.
Corporate employees and startup entrepreneurs worked together in units called
Advisory Boards (AB) (see Figure 1.). One AB included entrepreneur(s) of one
startup and 3 to 5 corporate employees of different corporations. Hence, advisory
board members did not know each other in advance. During the program (from
August 2015 to June 2016), advisory boards met typically once every month and
one meeting took approximately 2-3 hours. AB members committed to advise and
work on startup’s strategy, business plan and everything that startup’s present
situation required, together with the entrepreneurs.
2
Large
Corporation
Growth Strategy
Roadmaps
EEX Advisory
Board
Corporation
Corporation
Corporation
Small
ent r epr eneur ial
company
Figure 1. Forming of advisory boards in EEX program. Copyright EEX Oy.
As this kind of initial setting the EEX program provided a unique opportunity to all
participants to develop themselves personally as well as their knowledge in
business and strategy.
Furthermore, the EEX also provided numerous interesting research possibilities
from different perspectives and made it as a challenging task to choose the
research topic for this thesis.
1.3 Research problem and objectives
Since EEX was new and unique program, there were no previous research
available. Hence, in the beginning the priority was in understanding the “EEX
phenomenon” – what kind of experience it is and how it helps to develop the
participants.
In this thesis the focus is on corporate employees and how they experienced the
EEX program. Hence, the research target chosen for this study represents leaders,
managers and directors who self-selected to take part on the EEX program and
wanted to learn more about entrepreneurship and startup business and in this
way improve their leadership skills.
3
The purpose of this research was to understand what is entrepreneurial leadership
and how it can be develop or learned in the first hand advisory work during the
EEX program. Corporate employees, who were already experienced leaders, were
exposed to entrepreneurship – step by step this resulted the idea to study
entrepreneurial leadership.
To this end, the following research questions were formed:
1) What are the expectations and motivations of corporate employees to
participate in EEX program?
2) How the corporate employees perceive entrepreneurship and leadership
and have those perceptions changed during the program?
3) What are the critical experiences and/or situations, where corporate
employees’ entrepreneurial mind-set has develop/improved?
In this thesis, contributing literature was used to create the theoretical
background of the study and answer to the questions, what is entrepreneurial
leadership and how it can be learned. The empirical part of this thesis is created
around the research questions. The data was collected by interviewing the
corporate employees and altogether, eight interviews - one corporate employee
from every advisory board were interviewed.
1.4 Structure of the thesis
This thesis starts with providing theoretical background for the study. First
important definitions are introduced and the development of entrepreneurial
leadership is considered from the perspective of entrepreneurship as well as from
the perspective of leadership. Next, some important factors and attributes for
entrepreneurial leader are examined in more detail. This continues with a brief
outline of learning through critical incidents and reflection. Finally, a framework
of entrepreneurial leadership is proposed.
Chapters 3 and 4 form the empirical part of this thesis. Here the research method
and design is elaborated more closely and the results are reported. Finally, the
chapter 5 is about discussion and conclusions. Here, the results are discussed,
4
conclusions introduced and some suggestions are made for future research
together with the recommendations to improve the EEX program in the future.
2 Theoretical background of the study
2.1 Development of entrepreneurial leadership
Entrepreneurial leadership, like the term reveals, has its roots in extensively
studied fields of leadership and entrepreneurship. Entrepreneurial leadership is
relatively new trend in leadership studies and it has interested scholars
increasingly at 21th century (Covin, Slevin 1991, Fernald Jr, Solomon et al. 2005,
Leitch, McMullan et al. 2013, Greenberg, McKone-Sweet et al. 2011, Kuratko
2007).
While other researchers admit its relevance (Middlebrooks 2015,
Greenberg, McKone-Sweet et al. 2011, Kuratko 2007) other claimed it is an
oxymoron as an attempt to combine two contradictious terms (Fernald Jr,
Solomon et al. 2005). Because both fields are full of different definitions, it is not
a surprise that when putting these terms together there is no consensus on what
entrepreneurial leadership means (Cogliser, Brigham 2004).
During their research history, leadership and entrepreneurship have both
undergone a transition from studying personal traits and behavior to focusing
more on what leaders and entrepreneurs actually do and how they interact with
their environment (Cogliser, Brigham 2004, House, Aditya 1997). Typically, trait
theories focus on attributes identifying leaders or entrepreneurs from those who
are not. Traits are general personal characteristics, such as personality types,
values, motives, and capabilities, which influence individual differences in
behavior. Recently leadership research has focused more on the combination of
individual and contextual factors and how these can explain the differences in
effectiveness (Vecchio 2003).
This chapter provides literature review of entrepreneurial leadership and seeks to
understand what are the relevant traits, attributes and dimensions related to a
5
successful entrepreneurial leader. First, important definitions are elaborated.
Second, entrepreneurial leadership is considered from both the perspectives of
entrepreneurship and leadership and, finally, frameworks and models of
entrepreneurial leadership provided by recent literature are introduced.
2.1.1. Definitions
While studying through the contributing literature of the topic, I soon noticed that
entrepreneurial leadership can also be called intrapreneurship or corporate
entrepreneurship and even entrepreneurial leadership is equivocal depending on
the context and perspective taken. All the terms have similarities - but are
approached from slightly different point of views. Typically, leadership has been
studied in entrepreneurial setting instead of studying entrepreneurship among
corporate leaders. The latter is relatively new direction in leadership studies
(Greenberg, McKone-Sweet et al. 2011). While there are two interesting questions
considering entrepreneurial leadership – what are the implications if leaders act
more like entrepreneurs and how entrepreneurs can become more effective
leaders (Middlebrooks 2015) – this thesis seeks to study the first one.
Entrepreneurial
leadership
can
illustrate
the
process,
where
startup
entrepreneur(s) founds his company and eventually exists by selling or renouncing
his company to another shareholder. One definition of startup is “an organization
formed to search for a repeatable and scalable business model” (Blank 2010), and
thus, startup is not just a small company, tiny version of large established business
organization. Different phases of the startup cycle require different set of social
skills, resource management and strategic thinking which entrepreneur needs to
manage and lead (Vecchio 2003). Though, in this thesis the focus is not on
entrepreneurs and their leadership skills but on ordinary managers and directors
and how they can be more entrepreneurial in their everyday work.
Intrapreneurship on the other hand describes isolated entrepreneurship inside the
organization, such as managing startup inside the larger organization. As an
example at the current moment large IT company from Finland called Tieto Oyj
has its own semi-independent startups inside the organization (Kauppalehti 2015).
6
It can be assumed that this is an increasing trend and there will be many other
similar inner startups inside large companies and new flexible organization forms
in the future. Normally these inner startups have their own lifecycle and the
decision are made separated and not through regular management structure of
the large organization – to imitate typical startup conditions. Although there have
to be certain amount of guidance and interaction. (Antoncic, Hisrich 2003) For this
need leaders with more entrepreneurial like mind-set can become an asset to the
organization.
Corporate entrepreneurship is term used by e.g. Kuratko and Hornsby (2015) while
Greenberg (2011), Middlebrooks (2015) and Solomon (2005) use the term
entrepreneurial leadership. Corporate entrepreneurship has defined several ways
and nowadays, it consists of two parts, which are “corporate venturing” and
“strategic entrepreneurship”. Corporate venturing describes the adding of new
businesses to the corporation, which can be reach by internal, cooperative or
external
corporate
venturing.
(Kuratko
2007)
By
contrast,
corporate
entrepreneurship strategy is defined as “a vision-directed, organization wide
reliance on entrepreneurial behavior that purposefully and continuously
rejuvenates the organization and shapes the scope of its operations through the
recognition and exploitation of entrepreneurial opportunity.” (Ireland, Covin and
Kuratko in Kuratko 2007, p.6) Like the definitions reveal, corporate
entrepreneurship describes entrepreneurial behavior more on organizational
level, while in this thesis the perspective is on individual level and hence, the term
entrepreneurial leadership is used.
In general, these researchers and their teams focus on entrepreneurial activity, its
necessities and implications in large organizations. In this thesis, the term
entrepreneurial leadership is used to cover up both terms and describe leaders’
entrepreneurial activity in already established and somewhat stable corporations.
7
2.1.2. From the perspective of entrepreneurship
Until millennium the field of entrepreneurship suffered the lack of conceptual
framework, which would have examined a set of empirical phenomena not
explained or predicted by conceptual frameworks borrowed from other fields. In
reality, the field was a jumble of studies related to small
businesses and new
ventures, and housed under a vast label of entrepreneurship (Shane,
Venkataraman 2000).
Since the pioneering publications of Shane and
Venkataraman (2000, 2003) the research of entrepreneurship has become more
popular (Wang 2014), yet before there was only a handful of theoretical articles
published in major management journals (Busenitz 2003). However, the research
field of entrepreneurship became more focused and stable in 2005 as resulted in
systematic literature review on entrepreneurship research (2000-2012) by Wang
and Jessup (2014).
In order to have entrepreneurship, first, entrepreneurial opportunity is required
(Shane, Venkataraman 2000). Furthermore, the definition of entrepreneurship is
often related to a context, such as a startup or small business owner, and in terms
of actions taken in this context. These actions can be divided into two broad
sections: endeavors to influence others and seeking new opportunities. Both of
these sections are closely related to the established areas of leadership and
interpersonal influence. In this light, it is easy to understand the debate whether
or not entrepreneurship should be treated as independent field of study. (Vecchio
2003)
Entrepreneurial leadership arises from three different concepts, which are
entrepreneurship (Schumpeter 1934), entrepreneurial orientation (Miller 1983,
Covin, Slevin 1988) and entrepreneurial management (Stevenson 1983). Gupta et
al. (2004) described this as a strategic approach to entrepreneurship in order to
continuously seek and enhance the capabilities to create value in the organization.
They argued that in this way entrepreneurial mind-set can form the basis of
competitive advantage both in a small and large organizations.
8
There have been numerous attempts to develop entrepreneurial profiles (Vecchio
2003) and measure entrepreneurial orientation (Zimmerman 2014). The factors of
successful entrepreneurship have interested scholars already several decades and
the interest does not seem to diminish. It is not surprise, knowing that
entrepreneurship has described as one of the engine of change and development
in capitalist society (Shane, Venkataraman 2000).
Typically, entrepreneurship is related to taking actions, which quite often require
a high risk-taking capability. Proactivity and innovativeness have also been
connected to successful entrepreneurial behavior (Covin, Slevin 1991, Kuratko
2007). Commonly accepted and studied personal traits, which have been linked to
successful entrepreneurs are so called entrepreneur’s “big five”: risk taking
propensity, need for achievement, need for autonomy, self-efficacy and locus of
control (Vecchio 2003). This big five have been used to identify and measure
individual’s entrepreneurial orientation (Zimmerman 2014). It can be argued
whether these traits and behavioral attributes are characteristics of an individual
or do these features need a more process-oriented approach and, for example,
arise from the interaction of a team.
In the next chapter (2.2.), some of these traits and attributes which are critical to
entrepreneurial activity among leaders are introduced in more detail.
2.1.3. From the perspective of leadership
Leadership is the most studied single domain in behavioral sciences (Hunt, Dodge
2001), and it can be traced back as far as to the ancient civilizations, where leaders
had symbolic roles in literature (e.g. Bible and classics of Greece and Rome) (Bass
1997) (see also Sun Tzu). Although, it is not until the 20th century, when scholars
have provided more systematic attention to research (Cogliser, Brigham 2004).
Leadership is no longer a study of personality traits and differences between
individuals. Nowadays, in addition to leader, the field of leadership focuses also
on followers, peers, supervisors, work setting/context, and culture, including a
9
much broader array of individuals representing the entire spectrum of diversity,
public, private, and not-for-profit organizations, and increasingly over the past 20
years, samples of populations from nations around the globe. Hence, leadership is
no longer defined as a person’s characteristic or difference, but instead is
represented in various models as dyadic, shared, relational, strategic, global, and
complex social dynamics. (Avolio, Walumbwa et al. 2009, Tal, Gordon 2016, Bass
1997)
In the beginning, I soon realized that it is not possible to either find nor study all
the contributing leadership literature due to the huge amount of it. In order to find
the relevant studies and theories of leadership I started to ask myself questions –
what are characteristics, processes and environments that support organization’s
flexibility, faster adaptation, ability to innovate and sustain individuals’ curiosity
towards new opportunities and learning, and also drive them to constantly
improve their performance. In other words, what is needed to facilitate
entrepreneurial behavior in organizations.
Several leadership theories have tried to answer this question. However, the
relevant theories chosen carefully from the contributing literature were
transformational leadership, team-oriented leadership, value-based leadership
and self-leadership. (Gupta, MacMillan et al. 2004, Greenberg, McKone-Sweet et
al. 2011). By adapting these four leadership theories together there is an enhanced
possibility to understand this complex and dynamic field of entrepreneurial
behavior and its requirements in establish organizations.
Transformational leadership has its focus on leaders and their abilities to be
inspirational and elicit superior performance from followers through facilitation of
their self-interested behavior by appealing to higher needs of self-actualizations,
personal values and inclined motivations of followers (Gupta, MacMillan et al.
2004, Bass, Waldman et al. 1987). Transformational leadership is often described
by using four dimensions, which are called the four I’s (1) Idealized influence
(attributes/behaviors), (2) Inspirational motivation, (3) Intellectual stimulation,
and (4) Individual consideration. (Furtner, Baldegger et al. 2013) Thus,
10
commitment, involvement, motivation in deeper levels and employees’ sense of
making meaningful work are related to successful transformational leadership.
These are also requirements for healthy and driven employees in any
organization. It is worth noticing that even though transformational leadership is
the most influential field of research, shared, complexity, and collective types of
leadership are the approaches that have shown the next greatest intensity of
research. (Tal, Gordon 2016)
Team-oriented leadership or shared leadership has gained a lot of attention in the
21st century. Successful global companies, such as Google, argue that one of the
reasons of their success has been shared leadership to all team members (Hamel
2007). This has given team members both the chance to influence on their work
and take responsibility of it, which have resulted committed employees with
superior performance (Gupta, MacMillan et al. 2004, Hamel 2007). Today’s
organizations have experienced the demand of constant change and renewal and
to overcome these demands commitment and responsibility are required for
every team member. Thus team-oriented leadership in an established need in
business life.
Value-based leadership elaborated by House and Aditya (1997) refers to leaders’
ability to express and articulate a compelling vision or mission in an inspiring way.
Same time leaders show high commitment, self-confidence both themselves and
their beliefs and setting themselves as an example leaders attract followers.
According to value-based theory leaders require to attain followers’ motivation to
achieve high expectations and improved performance without any extrinsic
rewards. This theory reclaims its place especially in organizations where resources
are limited and employees’ motivation cannot be assured by extrinsic rewards.
Self-leadership was originally conceptualized in late 80’s, which makes it relatively
new trend in leadership studies. (Manz 1986) Self-leadership originates from the
principles of self-regulation and self-management (Carver, Scheier 1981, Manz,
Sims 1980 in Williams 1997), and furthermore, it “incorporates intrinsic
11
motivation, self-influence skill development and strategic oriented cognitions”
(Pearce, Manz 2005) (p.133).
Self-leadership has been defined as “the process of influencing oneself to establish
the self-direction and self-motivation needed to perform” (Neck et al. 1995, p. 281
in Williams 1997). Through self-leadership person takes responsibility of one’s
performance and development, so it is easy to understand, that it has gained
considerable attention among several scholars. (Craig L.Pearce 2007, Williams
1997, Furtner, Baldegger et al. 2013) Research has found that self-leadership has
enhanced performance in several contexts, such as clinical, athletic, and
educational, and in addition, in employment context self-leadership has improved
performance, self-efficacy and satisfaction. (Williams 1997) Recently, selfleadership has positively connected to active leadership styles, such as
transformational and transactional leadership, and negatively to passive
leadership style. (Furtner, Baldegger et al. 2013)
Self-leadership is typically divided into three domains, which are behavioral,
motivational and cognitional. Behavioral domain represents self-attentional
processes that modify desired behavior for example by setting goals, rewarding,
punishing, or observing oneself. Motivational domain includes those strategies,
which help person to create and maintain one’s intrinsic motivation. (Furtner,
Baldegger et al. 2013) Natural reward elements of work include e.g. feelings of
competence, self-control, and purpose (Deci, Ryan 2014). The third domain is
cognitional, which includes thought pattern strategies. Those can include for
example visualizing successful performance, positive self-talk and evaluation of
one’s beliefs and assumptions. In order to be an effective and productive
individual/leader, these three domains need to work together smoothly. (Furtner,
Baldegger et al. 2013)
12
2.1.4. Different frameworks and models of entrepreneurial
leadership
Due to its novelty there is only a limited amount of empirical research on
entrepreneurial leadership. The research is still at the early stage and based on my
perception about the literature, the perspective has typically been either in
entrepreneurship or in leadership.
McGrath
and
MacMillan
(2000)
emphasized
the
importance
of
an
“entrepreneurial mind-set” as a key element in strategic decision making,
especially in environments, where competition is constantly growing and fast
changes are required. Entrepreneurial mind-set can be seen as a predecessor for
entrepreneurial leadership and declared need for new ways to manage and lead
(Gupta, MacMillan et al. 2004).
Studies trying to define entrepreneurial leadership have based on literature
reviews identifying the overlapping characteristics of successful entrepreneurs
and leaders (Fernald Jr, Solomon et al. 2005, Perren 2000). Solomon et al. (2005)
conducted a study of similarities between successful leader and entrepreneurs.
Based on their literature review they reported five features that were common for
both entrepreneurs and leaders. These are: 1) strategic leadership (vision, longterm goals), 2) problem solving skills, 3) timely decision-making, 4) willingness to
accept risks and 5) good negotiating skills. Three years earlier four common
attributes of entrepreneurs and leaders were identified. These were vision,
personal drive, innovativeness and risk acceptance. (Perren 2000)
Gupta et al. (2004, p.242) defined entrepreneurial leadership as “leadership that
creates visionary scenarios that are used to assemble and mobilize a ‘supporting
cast’ of participants, who become committed by the vision to the discovery and
exploitation of strategic value creation.” Here they identified two fundamental
needs – the creation of vision and the need of a committed team capable of
enacting that vision. These two are interdependent since the either is useless
without the other. Furthermore, entrepreneurial leader needs to be capable of
13
1) Adopt exceptional dedication and effort from organizational stakeholders
2) Convince them of their ability to achieve goals
3) Express essential organizational vision
4) Ensure their effort will lead to successful results and
5) Endure in the face of environmental change
As a part of the research focusing on future leadership skills and how those skills
can be taught to students of management and leadership, Greenberg et al. (2011)
developed a three dimensional model to describe more detailed what
entrepreneurial leadership actually is. The three dimensions include, first
cognitive ambidexterity, second responsibility and sustainability, and last self- and
social awareness.
Cognitive ambidexterity represents, how entrepreneurial leaders are required to
possess and manage both the logic of creation and prediction. These two logics
become important, while making decisions. One can rely on the past and predict
logically based on previous data and knowledge that what had happened before
probably will happen again. On the other hand, if there is no data or knowledge
available or the situation is totally new, one may need to rely on creativity and
make decisions and take actions without the previous data and knowledge.
Greenberg et al. (2011) argue that in ideal case entrepreneurial leader can utilize
both ways while making decisions.
For future leaders it is necessity to understand that social, environmental and
economic responsibility and sustainability are the foundations of successful
business. This is challenging, while decreased amount of natural resourced,
climate change and increased inequality in social and economic classes have been
“hot topics” in debates especially in developed countries around the world.
In addition, entrepreneurial leaders want to develop their awareness of
themselves as well as the social context around them in order to guide effective
decision making and action. Greenberg et al. (2011 p.2) define entrepreneurial
leadership accordingly:
14
“Entrepreneurial leaders are individuals who, through an understanding of
themselves and the contexts in which they work, act on and shape opportunities
that create value for their organizations, their stakeholders, and the wider society.”
Entrepreneurial leadership is not the same as entrepreneurship, which is typically
seen as activity for new venture creation. Instead, compared to transformational
leadership the model of Greenberg’s et al. is actually quite similar (Karol 2015).
Thus it can be argued that the model of Greenberg’s introduces entrepreneurial
leadership strongly from the perspective of leadership.
Instead, according to Kuratko (2007) to be able to better understand
entrepreneurial leadership it might help to know theories of entrepreneurship. As
the concept of entrepreneurship is interdisciplinary and as such several
approaches can rich one’s understanding of it. Entrepreneurship has been often
approached in three action-based dimensions, including proactivity, risk-taking
and innovativeness. This distinction was first made by Covin and Slevin in 1991 to
describe entrepreneurial orientation and since have been widely used in the study
of entrepreneurship and later in entrepreneurial leadership, which many scholars
have also called as corporate entrepreneurship. (Kuratko 2007, Covin, Slevin 1991,
Kuratko, Hornsby et al. 2015).
According to Kuratko (2007) the 21st century leader understands the importance
of entrepreneurial action with managers at any level to create sustainable
competitive advantages as the foundation for profitable growth in organization.
Furthermore, organizations, and hence its employees, are required to
continuously seek new opportunities and innovate in terms of products,
processes, technologies, different administrative routines, and structures. In
addition, the ability to proactively compete in (global) markets is required in order
to succeed in 21st century. Thus, the two important attributes of entrepreneurial
leader are proactivity and the ability to innovate and seek new opportunities.
It is not a surprise that there is no explicit definition or model for entrepreneurial
leadership – it has features and dimensions of both entrepreneurship and
leadership. These features consider organizational life in a width scale from
15
several different perspectives. A successful entrepreneurial leader requires to take
into account different approaches in decision-making as well as sustainability and
responsibility from social, environmental and economic perspectives (Greenberg,
McKone-Sweet et al. 2011). Entrepreneurial leadership is most of all
interdisciplinary, complex, dynamic and highly context depended activity and a
field of study.
2.2. Entrepreneurial leader – attributes, features e.g.
Like the previous chapter summarized, there is only few empirical studies
conducted about entrepreneurial leadership. In addition, most of the models have
emphasized either the perspective of entrepreneurship or leadership, instead of
trying to combine these perspectives equally. Drawn from the previous chapter,
the definitions and models introduced in recent literature and researcher’s own
conclusions, the most important attributes of entrepreneurial leader and
entrepreneurial mind-set are elaborated here in more detailed.
2.2.1. Innovativeness
Organizations are required to innovate new products and services in order to
sustain their competitiveness and market share at increasingly competitive field.
Since, organizations need employees who are able to create new, think “outside
the box “and take actions – not only planning or thinking of it.
The first image of innovation is often mythical – you probably can easily see an
image of Einstein looking scientist and yelling “Heureka!” - in your mind.
Something that happens only to individuals with exceptional skills, luck or genes
(Greenberg, McKone-Sweet et al. 2011). In contrast to this mythical image,
researchers believe that an innovation is often a result of passion and hard work,
and it usually involves more than one individual to the process. Here the good
news is, that an employee, a team or an organization can learn to be innovative!
Despite the debate and contradictions in innovation literature, most researcher
agree that process innovation process consist of three broad set of activities 1)
16
recognizing an opportunity, 2) creating alternative options, and 3) selecting and
refining options (Greenberg, McKone-Sweet et al. 2011).
Nowadays and especially in a work environment it is usually a team or group of
people, who succeed to create something new instead of only one person
(Greenberg, McKone-Sweet et al. 2011). According to Mumford et al. (2007)
leaders need to possess certain abilities in order to support creative efforts in
organizations. Abilities, such as sufficient technical expertise, creative thinking
skills, social skills and defining a problem are introduced among others. Even
though, leaders are only rarely the ones asked to work in generating ideas, they
must be able to envision the consequences of the ideas generated by others.
(Mumford, Hunter et al. 2007) Moreover, it is also important to acknowledge the
role of knowledge sharing and organizational learning as this is where innovations
emerge (Turner, Pennington III 2015, Mumford, Hunter et al. 2007), but it is not
discussed here any further.
Entrepreneurs are often seen as innovators, creators and visionaries, who believe
in themselves and take action despite the high risks (Cope, Watts 2000, Kuratko
2007, Kuratko, Hornsby et al. 2015). Thus innovativeness and the ability to
facilitate and support it can be seen as an important feature for entrepreneurial
leader as well to have in her/his tool bag.
2.2.2. Proactivity
Throughout the contributing literature, proactivity is seen as one of the key
elements while describing entrepreneurship (Covin, Slevin 1991, Kuratko 2007), it
has been connected to entrepreneurial success around the world (Kreiser, Marino
et al. 2013) and other positive outcomes (Fuller, Marler 2009). Proactive behavior
is self-driven, change-oriented, future-oriented and action-oriented and its aim is
to influence one’s environment or self (Björklund 2015).
“Proactivity involves challenging the current situation and working towards what
‘could be’.” (Strauss, Parker 2014) p. 2
17
Proactive behavior has been noticed as an important factor in innovation process
(Frese, Fay 2001) and it is hard to imagine innovative behavior, which is not
proactive at least in some level. However, not all proactive behavior is necessarily
innovative (e.g. seeking feedback). (Unsworth, Parker 2003)
In organizations, such as startup business, proactive individuals are believed to
contribute to the effectiveness in dynamic and uncertain environments. In
dynamic and uncertain contexts employees are required to use their own initiative
and actively influence on their environment, because it is rarely possible to
anticipate and pre-specified in advance what is needed from the individual.
(Griffin, Neal et al. 2007) However, proactivity does not necessarily contribute to
positive end results and can be damaging for both individuals and organizations
(Bolino, Valcea et al. 2010), and it is important for individuals to notice when and
how being proactive is beneficial and wise (Chan 2006).
For entrepreneurial leader proactivity is not only the observable behavior but
instead it is also a state of mind, or perhaps an attitude, which allows
entrepreneurial leader to continuously seek feedback, to challenge oneself by
questioning plans and actions, to discover new possibilities, to utilize network and
to meet customers and sell.
2.2.3. Risk-taking
Risk-taking is one of the most typical attributes related to an entrepreneur and
hence, it is also important function for entrepreneurial leader. Zimmerman (2014,
p.292) described risk-taking as a form of “decision-making orientation toward
accepting greater likelihood of loss in exchange for greater potential reward.”
Surprisingly, many studies have reported contradictious results whether or not
there is a clear connection between risk-taking propensity and successful
entrepreneurs. For example, scholars such Litzinger (1965), Brockhaus (1976) and
Masters and Meier (1988) were not able to establish correlation between risktaking and entrepreneurial orientation. On the other hand, differences were found
18
between entrepreneurs and managers (Carland III, Carland Jr et al. 1995) and
between entrepreneurs and the larger population (Stewart, Watson et al. 1999).
Thus, risk-taking propensity is not the difference between successful and
unsuccessful entrepreneurs. (Brockhaus 1980)
The diversity of research results may be explained by studies conducted Palich and
Bagby (1995) and Cooper, Woo and Dunkelberg (1988). Palich and Badgy reported
that entrepreneurial “types” saw ambiguous business scenarios more positively
and as opportunities unlike non-entrepreneurial types. Cooper, Woo and
Dunkelberg findings from the lab studies predicate that individuals, who believe
they are highly competent at decision-making recognize greater opportunities in
a risky choice situation. Those who feel themselves not competent enough
perceive threads and take fewer risks (Krueger, Dickson 1994). These results
indicate that it is more the perception and attitude that entrepreneurs have
towards the risky situations than the risk-taking propensity itself that matters.
Like the previous brief literature review showed, risk-taking propensity is used to
define entrepreneurial leadership by several scholars (Kuratko 2007, Zimmerman
2014, Kuratko, Hornsby et al. 2015) and this attribute draws strongly from the
perspective of entrepreneurship.
2.2.4. Vision and strategy
Vision is closely linked to both successful leadership and entrepreneurship. Even a
new concept – strategic entrepreneurship – have recently emerged (Kuratko,
Audretsch 2009). Both leaders and entrepreneurs need to share their or
organizations’ vision in order to succeed and effectively reach on the targeted goal
(Cogliser, Brigham 2004). Here lies a question – how to motivate and influence
your employees, team and other shareholders effectively in a right way? It should
be noted that this is not entirely about the skills of leaders or entrepreneurs, but
as interactive social process also attributes of the responders should be
considered (Vecchio 2003). However, in this thesis the perspective is subjective
and thus the focus is on the attributes of leaders/entrepreneurs.
19
Vision, mission and the values of organizations are typically a part of strategic
work. Mintzberg (1994 p. 114) described strategy making as “a process
intertwining with all that it takes to manage an organization”. As is simplest
strategy is determining, how to define and describe the right steps and actions in
order to move towards one’s or organization’s vision. (Kuratko, Audretsch 2009)
Normally in large organizations, a top management team, a board of directors or
some other party are responsible for managing strategy and its development.
While in startup’s or small companies there is rarely a group of people responsible
for creating a strategy. Instead more commonly that responsibility lies in the
shoulders of an entrepreneur, an owner or a small group of people, and thus the
attention given to strategy work may not be as explicit and formal as in large
organizations.
Many practitioners and theorists have incorrectly assumed that strategic planning,
strategic thinking, and strategy making have the same meaning. Strategic planning
can be defined as programming, describing neatly what are the concrete steps in
order to for example increase the market share 20 %. This is especially important
due to effective communication for employees and their engagement to work
towards the vision and shared goal. Otherwise the direction may easier be lost or
unclear. In addition, it may help to inform different shareholders, such as financier
and supplier, about the motives so that these different parties can help to achieve
its plans. (Mintzberg 1994)
Strategic thinking “synthesizes the intuition and creativity of an entrepreneur in to
a vision for the future” (Mintzberg 1994 in Kuratko et al. 2009) According to this
definition strategic thinking can emerge from daily details, routines and occasional
knowledge crumbs, which then can lead to more meaningful insights and ideas of
alternative directions. In that sense the devil lies in the detail. As its whole
“strategy making is a complex process, which involves the most sophisticated,
subtle, and, at times, subconscious elements of human thinking”. (Mintzberg 1994)
While one requires entrepreneurial mindset in creating effective strategy in
dynamic and uncertain environment (Kuratko, Audretsch 2009, Gupta, MacMillan
20
et al. 2004), one also requires leadership skills in order to communicate the
desired direction and engage people to work towards it. These leadership skills
can be seen emerging from transformational, team-based and value based
leadership theories. Hence, from the perspective of entrepreneurial leadership
vision and strategy are essentials to understand.
From the point of view of this thesis, it is important to notice that vision and
strategy work are important to any organization, which desires success, but this
thesis is not focusing on, how organizational strategy is developed. There are
several scholars, who have studied the developing of organizational strategy and
some excellent reviews have been published, which can provide more information
from the topic. (see e.g. publications of H. Mintzberg and C. Markides)
2.2.5. Decision-making
How entrepreneurial leaders make decisions, what sort of a process it is and what
are foundations of it, are interesting questions. In an environment where
competition and change happen fast – the traditional approaches to strategy and
decision making are inefficient compared to an entrepreneurial approach. (Bettis,
Hitt 1995, Eisenhardt, Brown 1998)
As already elaborated briefly, Greenberg et al. introduced the term cognitive
ambidexterity - two different approaches to decision-making, which includes
prediction and creation logics. One can rely on the past and predict logically based
on previous data and knowledge that what had happened before probably will
happen again. On the other hand, if there is no data or knowledge available or the
situation is totally new, one will need to rely on creativity and make decisions and
take actions without the previous data and knowledge. They argue that a
successful entrepreneurial leader needs both ways to think and decide while
prediction logic is typically more common among regular management leaders
(Greenberg, McKone-Sweet et al. 2011).
Three dimensions describing entrepreneurship in organizations are risk-taking,
innovation and pro-activeness dimensions (Covin, Slevin 1991), which have been
elaborated previously, affect and challenge decision-making. Gupta et al. (2004)
21
reminded the need of balance for effectiveness. While focusing on creating new
innovations, one must pay attention to the possible risk and similar while
proactive behavior may gain competitive advantage a collaboration may be
required in order to enhance learning and faster commercialization of innovations.
Sustainability and responsibility in decision making is important yet challenging.
Customers’, consumers’ and employees’ perceptions on, how organization is
handling their social and environmental responsibility can have a huge influence
on its brand image (Greenberg, McKone-Sweet et al. 2011). In today’s world this
creates a foundation to successful business. Organizations must carefully and
creatively pay attention what is the environmental and social footprint of its
supply chains. It is typical that organizations have a set of values and guidelines
describing, why the organization work the way it works. Obviously, the underlying
values and culture affect decision-making as well, and hence entrepreneurial
leader should be aware of those.
2.2.6. Building a team
Building a team is an important task of a leader. In the perspective entrepreneurial
leadership, the leadership theories (transformational, team-oriented and valuebased leadership) emphasized its importance. (Gupta, MacMillan et al. 2004)
There are several scholars, who have studied the theories, features and processes
of team building and its effectiveness in detail. However, here the most important
features of team building from the perspective of entrepreneurial leader were try
to identify.
When building an effective team, leaders are required to share power and
responsibility with the team and thus, their role become more facilitative and the
focus is on helping the teams to develop their self-management skills.
Furthermore, this requires that leaders forget the guidance of day-to-day team
operations, and instead try to facilitate team-oriented behavior, such as build
team-work skills, facilitate tasks and acquire resources.(Rapp, Gilson et al. 2016)
22
Studies have shown that sharing the power and responsibility (cf. shared
leadership) with the team have positive outcomes. These include e.g. increased
productivity, work quality, customer satisfaction, process improvement, safety,
and performance (Maynard, Gilson et al., 2012, Maynard, Mathieu, et al., 2012,
Seibert, Wang, & Courtright, 2011 in Rapp, Gilson et al 2016). However, the results
are variable, whether or not an external leader has positive effects to the team
performance and its effectiveness. (Rapp, Gilson et al. 2016, Ammeter 2002,
Pearce, Sims Jr 2002) On the other hand, too much self-management in teams can
be a slippery road and lead to undesirable outcomes. (Barker 1993)
In today’s organizations, teams are the functional units that build organizations’
success.(Rapp, Gilson et al. 2016) It is impossible (at least for current technologies)
to cover all the required roles, task and functions without the team, when
organizations grow and business is scaled up. Hence, it is important to build a
team, which works together towards the vision according to the strategy. (Gupta,
MacMillan et al. 2004). Just like Selznick (1957) reminded “strategies take on value
only as committed people infuse them with energy” (P. Selznick 1957 in Mintzberg
1994 p.109) According to value-based leadership, entrepreneurial leader build
commitment towards the vision by affecting followers’ values and underlying
needs. In ideal case, the leader should attract the intrinsic motivation of the
followers, and there should not be need for extrinsic rewards to increase the
commitment. Leader needs to know, how to communicate capturing vision and by
personal example build commitment and engage team members to work towards
the vision.
On practical level, entrepreneurial leader needs to build a team and facilitate its
team-oriented behavior and self-management. This also includes that team
members are given a responsibility and thus, an opportunity to develop their skills
together with their tasks and projects. By sharing tasks, responsibility and power
with team members, entrepreneurial leader also takes care of herself and her
coping.
23
2.2.7. Leading yourself and influencing others
It has been argued that without leading oneself, person is capable to lead any
other person either. (Craig L.Pearce 2007) Day and Harrison (2007) stated that
identity is the source of meaning, from which leaders operate. Accordingly, they
argue, that focusing on leaders’ identities, there are more possibilities to
understand of more profound development than through efforts, which just focus
on a set of tools or skills to be learned. Hence, the need to know and understand
who you are is especially important for a leader, whether or not (s)he is
entrepreneurial. It is also important to notice, that if (entrepreneurial) leaders are
not competent to self-leaders, their capabilities to managing stress, pressures and
furthermore influencing others effectively may vanish completely. (Craig L.Pearce
2007)
Typically, a leader serves as an example and role model for other employees.
Hence, the leader has a unique opportunity to present honesty, integrity and
ethics in all key decisions. (Kuratko 2007) On the other hand, this may mean that
leader’s behavior is under a tighter observation. (Binney, Wilke et al. 2005,
Alvesson, Sveningsson 2003) Binney et al. (2005) argued, that leaders were more
efficient, when they “bring themselves in as they are” instead of hiding behind
some role. The ability to be present, listen and pay attention to one’s followers
and their concerns, were seen as important factors. Interestingly, Alvesson and
Sveningsson (2003) found out, that the way leaders talk about leadership, was
glorified, when in reality leading was done through mundane actions, such as
discussing and listening.
Already Manz (1986) assimilated self-leadership to double-loop learning (see next
chapter 2.3.1). When a person is capable of leading oneself, (s)he is also capable
of developing and learning. This can be described as desirable attitude or mental
mode to anyone, who wants to develop. This creates an opportunity for
continuous improvement. While person is willing and capable to reflect her
thought patterns, (s)he is also able to change them or improve them.
24
Self-leadership theory highlights the importance of knowing oneself, both
weakness and strengths and building one’s leadership on top of this base, being
self-motivated to continuously learn and maintaining the attitude of “always a
student”.
2.3. Learning in entrepreneurial context
The purpose of EEX program is to provide a unique experience for its participants,
offer new perspectives and different context as well as to give opportunities to
learn from the experience and also from other participants. In order to understand
how individuals create their new mental schemas and implement their new skills
in practice we need to take a closer look what is learning. Even though learning is
a widely used and common term, the contributing literature reminds both
theorists and practitioners of the complexity of the learning phenomenon. Hence
any discussion trying to define or describe learning unambiguously is somewhat
futile. (Cope, Watts 2000)
In general, through learning one’s behavior can change but learning can also be a
cognitive change, meaning the altered way of thinking or understanding.
Obviously, the latter complicates how learning can be observed or measured
(Cope, Watts 2000). According to Huber (1991, p.89): ”An entity learns if, through
its processing of information, the range of its potential behaviors is changed.” In
the light of this ambiguity it is not surprising that evaluating learning programs and
their results has been found challenging by researchers all over the world.
Assessing the impact on participants’ cognitive resources and skills is definitely
difficult task (Lindh, Thorgren 2015, Angelides 2001).
This is also particularly challenging to anybody developing completely new
program like the EEX, trying to understand what are the potential outcomes of the
program. Fortunately, this problem worked as a catalyst for more systematic
research into “what the program is about”. It is assumed that the EEX program
gives opportunities to its participants to learn “entrepreneurial mindset” via “out
of the box” and “hands on” experience of startup entrepreneurship.
25
Next a brief theoretic framework for learning in entrepreneurial context is
provided. First, the different levels of learning are introduced. Second, the
definition of critical incident is elaborated as well as the meaning of critical
incident and reflection in learning. Finally, conceptual framework for learning in
entrepreneurial context is introduced.
2.3.1. Different levels of learning
Based on their phenomenological study of “natural” learning in managerial work,
Burgoyne and Hodgson (1983) developed three levels of learning. Burgoyne’s and
Hodgson learning level 1 is analogous to “single-loop learning” term created by
Argyris and Schön (1978). These are described as assimilation of information
which has immediate utility but no real long-term or developmental implications
or information that enables routines or immediate tasks. In literature, this type of
learning is referred to repetitive, rote, or surface learning (Cope, Watts 2000).
Level 2 learning associates assimilation of some information, knowledge or skill
that is transferable from the present to a different situation. Here an individual
“has changed his conception about particular aspects of his view of the world in
general: the aspect being, however, situation…specific” (Burgoyne, Hodgson
1983). They claimed level 2 learning to be comparable to single-loop learning.
Level 3 learning is the deepest of the learning levels and can also be called as
reflective learning and similar to Argyris’ and Schön’s “double-loop” learning.
Through reflection individual not only question and scrutinize the established
ways doing things but also those hidden values and perceptions which encourage
this behavior (Cope, Watts 2000, Burgoyne, Hodgson 1983).
The difference between level 2 and 3 learning is that level 3 is not situation
specific, instead level 3 learning tends to influence on much deeper level –
considering learner’s self-awareness, vision and personal understanding. In order
to achieve higher-level learning individuals are required to proactively reflect from
previous experiences and evaluate the next possible actions – especially in
entrepreneurial or managerial settings (Cope, Watts 2000).
26
It has been claimed that when individuals, previously inexperienced in the field of
entrepreneurship, undergo critical events, they will not only learn from the event
but also develop their ability to think and act more entrepreneurial way based on
those events (Pittaway, Thorpe 2012, Cope, Watts 2000). It is assumed that the
critical incidents happened during the EEX program contribute to level 2 and level
3 learning. Those incidents can be either personal – happened directly to the
corporate employee or those can be indirect e.g. critical situations happened to
startup entrepreneur, which corporate employee can perceive.
2.3.2. Definition for critical incident
Critical incident method has interested many scholars, who have applied it in
different fields of studies. (Lindh, Thorgren 2015, Kaulio 2008, Chell, Pittaway
1998, Tripp 2011) It is not surprising that there are different definitions of what is
actually a critical incident.
Originally, Flaganan (1954 p.327) defined critical incident as “any observable
human activity that is sufficiently complete in itself to permit inferences and
predictions to be made about the person performing the act. To be critical, an
incident must occur in a situation where the purpose or intent of the act seems
fairly clear to the observer and where its consequences are sufficiently definite to
leave little doubt concerning its effects”. According to this definition, the criticality
of the incident comes from its evidence and the responsibility, whether or not the
incident is critical, lies on the researcher shoulder. (Angelides 2001)
Later, the importance of clarity of the critical incident for the observer has
decreased. Instead, scholars, such as Angelides (2001) and Cope (2000), have
started to pay attention to incidents that are not necessarily dramatic or obvious,
but are somewhat important and meaningful for the person experiencing those.
This means, that vast majority of critical incidents can be “normal” situations or
events with somewhat surprising characteristics. (Angelides 2001)
Tripp (2011) described that first ‘critical’ events may appear as ‘typical’ and that
their criticality is based on the justification, the significance, and the meaning
given to them. These incidents do not necessarily bare an emotional loading or a
27
tension, instead they can happen in routine like every day work. What makes them
critical is that they point out those significant underlying trends, motives or
structures. It should be taken into account, that critical incidents are retrospective
and can be identified only after the consequences of the incidents are known (Gray
2007). In this thesis the definition of critical incidents is similar to Tripp’s (2011),
thus taken into account also possible routine-like incidents, which are not
necessarily obvious for the observer.
2.3.3. Reflection and critical incidents
Reflection refers to a process of meaning-making, which can be described as
systematic, intentional and disciplined. This process moves learner from one
experience to another, while deepening the understanding of its connections and
relations to another experiences. (Lindh, Thorgren 2015) Reflection is
fundamental for higher-level learning (Cope, Watts 2000, Pittaway, Thorpe 2012,
Lindh, Thorgren 2015), and it is also linked to new insights and knowledge and
cognitive development, such as enhanced information processing, conceptual
schemes, and frames of reference (Argyris, Schön 1978). However, reflection
requires a certain level of self-awareness, including awareness of one’s emotions,
thought and actions. (Lindh, Thorgren 2015) In this light it is obvious that learning
to think more entrepreneurially or improving one’s leadership skills requires
ability to continuous reflection.
Critical incidents are connected to learning through a process of reflective analysis.
Unexpected and somewhat surprising events can trigger the process of reflection
and cognitive development, where individuals are force to move beyond tacit
judgments, knowledge structures, and skills to deal openly with the situation at
hand. (Argyris, Schön 1978) According to Tripp (2011) the creation of critical
incident contains two stages: first the nature of the incident is noticed and
described, for example through an interview. Second, the incident becomes
critical, when it is connected to a wider context. Additionally, Lindh and Thorgren
(2015) introduced an emerging concept of critical event recognition. They argue,
that reflective learning does not start from the experience of critical events, rather
28
it begins from the recognitions of such events. This can be seen as an initial step
for enacting the reflective process in which one’s experiences are evaluated and
connected to the learning process and future goals. Hence, it is not the incident or
event itself that influences the development path, but the ability to recognize such
events and incidents and further use the ability to reflect and connect those to a
wider context.
2.3.4. Learning in entrepreneurial context
Learning in entrepreneurial context has interested several scholars and it has
increased its popularity as a field of study especially during the last two decades.
(Lindh, Thorgren 2015, Pittaway, Thorpe 2012, Cope, Watts 2000, Greenberg,
McKone-Sweet et al. 2011) During his academic career, Jason Cope developed a
conceptual framework for entrepreneurial learning (Pittaway, Thorpe 2012). In his
research, he focused on reflective learning from critical incidents and mistakes
(Cope, Watts 2000, Pittaway, Thorpe 2012).
It has been argued that unexpected events, which can stimulate the process of
reflection and cognitive development can be identified as critical events. (Cope
2003) In addition, one is required to recognize these events as critical. This
happens through reflection, which requires a certain level of self-awareness. As its
simplest, the process is represented in the figure 2. However, this theoretic frame
does not consider the effect of time in this context, which certainly has its effects
on learning.
Figure 2. Reflective learning process in entrepreneurial context.
In this context entrepreneurial learning refers to overall entrepreneurial
leadership and entrepreneurial mindset, which both can be categorized as
29
“higher-level learning”, because both require (proactive) reflection and can lead
to possible changes in the level of self-awareness, vision and personal
understanding. Entrepreneurial mindset can be seen as an ability to recognize
opportunities and threats and to act on them quickly, even in an uncertain
environment. (McGrath, MacMillan 2000) As Haynie et al. (2010 p. 217) argued,
the entrepreneurial mindset builds on a foundation of cognitive adaptability,
which they defined as “the ability to be dynamic, flexible, and self-regulating in
one’s cognitions given dynamic and uncertain task”.
It is assumed that the EEX program provides for an entrepreneurial context to its
participants to learn. When participants, who did not have previous experience
from the field of entrepreneurship, are exposed to dynamic startup life, they face
potential critical incidents. These experiences can be utilized to reflect and learn
to think and act more entrepreneurial way in other contexts in the future.
2.4. Framework of the study
This chapter outlines a framework of this study. First, a framework of
entrepreneurial leadership is given. In the second chapter 2.4.2. learning in
entrepreneurial context is linked to entrepreneurial leadership providing the
framework of the study.
2.4.1. What is entrepreneurial leadership?
Like the previous literature review shows, there are not explicit and
comprehensive answer to the question, what is entrepreneurial leadership. Or
what is really the difference between leadership and entrepreneurial leadership?
The topic has been approached either strongly from the perspective of
entrepreneurship or leadership, but there are not really too many attempts to
combine these two. However, as a result of this literature review, and other
supplementary material related to EEX program, the following emergent
framework was originated during this thesis project (see figure 3) as an attempt
to combine both the perspective of entrepreneurship and leadership equally.
30
Figure 3. The emergent framework of entrepreneurial leadership
The first part is called entrepreneurial drive. Action is closely related to
entrepreneurship and obviously, that is also required from entrepreneurial leader
- walk the talk! However, the nature of action is strongly dynamic due to fast
changing competition in many business areas. In my view this is also the main
dimension and the most visible one, that separates “ordinary leadership” from
entrepreneurial leadership. The three specified traits to describe the dynamic
action required in today’s organizations are pro-activeness, risk-taking propensity
and innovativeness. (see e.g. Covin and Slevin 1991)
The ability to take and control risks can be related to the questions, what would
you do, if it was your own money, would you still invest and believe in the payback.
This kind of thinking also requires certain level of commitment to individual’s
organization.
Proactivity can be seen most clearly in a relation to sales and its functions. In ideal
cases entrepreneurs and organization’s employees, who offer a service or a
product, need to proactively approach possible clients and partners, and work the
demand and market. Proactivity also entails being one step ahead of the market
and already prepared, before the situation or environment forces one to react.
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Innovativeness seems to be the hardest of these three actions, since it includes
also pro-activity actions and a risk-taking ability, and it is required from every
organization no matter the size. In startups innovativeness is especially shown in
the way they approach and create products and services prioritizing the needs and
wishes of customers. Based on this thesis project and what I have experienced and
learned as a part of EEX program, organizations should focus on facilitation of
innovation processes and especially encourage employees and managers to
support other employee’s innovativeness. (Peltonen 2016)
The second box in the above picture visualizes direction. In order to act effectively,
organization requires a direction, a compass heading. The direction originates
from the vision of organization and the strategy describes how to work towards
that vision, which are the paths that one should follow. In addition,
entrepreneurial leader need to be committed to this vision and (s)he also needs
to communicate it clearly to other members of organization. Together the
dynamic actions and the direction create the most visible and concrete part of
entrepreneurial leadership, while the link between these two boxes action and
direction is naturally decision-making.
The circle of four boxes describes the critical skills of leadership required for
successful entrepreneurial leader. These skills help to pursue the vision, but also
effect and create organizational culture. The beginning is good self-awareness. It
is many times said, that leaders need to know themselves, what are the strengths
and weaknesses, how to develop those and to act successfully on this basis. Good
self-awareness is linked to self-actualization. While one knows, who (s)he is, where
(s)he is good at and what is important to her/him, it is easier to find the matters,
which create meaning and bring joy and enthusiasm to one’s life and act
accordingly. These two boxes are closely linked to autonomous motivation (Deci,
Ryan 2014, Ryan, Deci 2000, Spreitzer, Porath 2014). However, this falls outside of
the scope of this study, and thus is not elaborated more closely.
Every leader needs to have the ability to influence others in order to lead the
employees and organization towards the common goal and vision. There are many
32
ways to do this and because human interaction is complicated, it is rather difficult
to build a realistic and all-encompassing model of it. However, the influence is
mostly interaction, as its simplest is listening and talking (Alvesson, Sveningsson
2003, Binney, Wilke et al. 2005). The way I see it, is that in an ideal case, where
leader exhibits a good self-awareness and (s)he finds meaning and joy in her/his
work, (s)he naturally starts to influence others by spreading her/his enthusiasm
around.
Complexity of business requires almost always wide range of skills and
competences, which is easiest to attain through heterogeneous group of people.
Leader needs to acknowledge the special skill set, requirements and knowledge in
order to pursue the vision and go to the right direction. Whether it is a startup or
established organization, one person is not able to handle all of the functions and
features needed in growing business, at least not for long. Therefore, leader is
required to share her/his responsibility as well as her/his power with other team
members. It is also notable that recruiting right people to the team is an important
function itself, it cannot be taken for granted, and may often require particular
expertise in this area.
The last box describes the context, which, the context can emerge from multiple
backgrounds, but in this case is defined as organizational culture. The underlying
values, routines and way of doing things have their roots in organizational culture.
Naturally, this affects the leadership skills, vision and the entrepreneurial drive.
2.4.2. Synthesis - learning entrepreneurial leadership
Developing entrepreneurial leadership can be seen as a higher-level learning or
double loop learning, where individual is required to pay attention to one’s mental
schemas, assumptions, beliefs, and cognitive skills and possible changes in those.
This kind of higher-level learning requires proactive reflection and high level selfawareness, which is needed for one to be aware of her/his pattern of thoughts,
which then gives possibilities to change, strengthen or even deleting these
patterns of thoughts. (see e.g. Argyris & Schön 1978, Cope 2000, Pittaway &
Thorpe 2012 and Lindh & Thorgren 2015)
33
Self-awareness is vital part of self-leadership. Self-leadership includes three
dimensions, which are behavioral, motivational and cognitional. The cognitional
part includes the thought pattern strategies, such as evaluation of one’s beliefs,
assumptions and thoughts. (see e.g. Manz 1986, Williams 1997 and Furtner et al.
2013). This creates a link between higher-level learning and leadership
development. However, in order to rethink and questions one’s pattern of
thoughts a trigger is needed. These triggers can be surprising events, situations or
experiences, which evoke the reflective learning process. In other words, these
can be called critical incidents.
In this thesis through reflective interviews the critical incidents were tried to
identify and discover, how these affected corporate employees’ development and
learning. In addition, the framework of entrepreneurial leadership, which was
introduced in the previous chapter, was used to frame the interviews and the
research process. The features and attributes represented earlier helped the
researcher to structure the interviews, and to reflect the answers.
34
3 Research design and methods
The purpose of this study was to discover what is entrepreneurial leadership and
how it can be learned during the EEX program. This study focused on the corporate
employees, who had participated the EEX program. Moreover, three research
questions were addressed to guide the research project. These were
1) What are the expectations and motivations of corporate employees to
participate in EEX program?
2) How the corporate employees perceive entrepreneurship and leadership
and have those perceptions changed during the program?
3) What are the critical experiences and/or situations, when corporate
employees’ entrepreneurial mind-set has develop/improved?
Next, the methodology, used methods, data collection and its analysis are
described in more detail.
3.1. Methodology
This study represents a qualitative research, in which the aim is to understand the
complexity of the problem at hand and form a comprehensive overview of it. Due
to the novelty of EEX program a qualitative approach to research was justified, as
the meaning was to explore new phenomena and to capture individuals’ thoughts,
feelings, and understand their experience and possible development. (SAGE
Publications 2008)
This study consists of two parts: first, the theoretical background of the study, and
second, the empirical part, where the data was collected through semi-structured
interviews. In interviews the critical incident technique was used as a method. In
addition, some supplementary material was used to deepen the research’s
understanding of the phenomenon at hand.
Directly capture participants’ experiences and reflection, the primary method to
collect data were interviews. Interviews were also flexible and easy to organize
with participants (King 2004). Eight corporate employees from different ABs, who
35
have participated in EEX program during 2015-2016, were interviewed. These
eight interviews formed a cross section of the program participants. Every
interviewee made its own case and thus, this study has some similarities to casestudies. However, contrary to case-study, these interviews were not analyzed
separately.
To answer the research questions, the critical incident approach was used to
discover the critical learning points during the program. In addition, the emergent
framework of the study was used to reflect the interviewees responses and guide
the research process.
Critical incident technique was first introduced by J. Flaganan in 1954. This
qualitative research method was developed as a part of the studies made in the
Aviation Psychology Program in United States during the World War II (Flanagan
1954). Since this technique has been widely used in numerous studies examined
e.g. learning and entrepreneurship (Cope, Watts 2000, Chell, Pittaway 1998),
leadership (Kaulio 2008) and healthcare (Kemppainen 2000).
In critical incident method, interviewees were asked to describe and reflect
meaningful and critical events in detail. Either positively or negatively colored
events, incidents, challenges and successes, which might have effected on
interviewees perception about entrepreneurship, leadership and where learning
might have taken place, were seen as interesting and crucial data for the purpose
of this thesis. Critical incident technique provides a method to collect “first hand
evidence of relationship between context and the outcome”. (Chell 2004) The unit
of measurement were these critical and meaningful events in each of the cases,
which were then analyzed, categorized and interpreted.
The approach is abductive, due to the iterative nature of this study,
3.2. Entrepreneurship Exchange program – description
Entrepreneurship Exchange program (EEX) was first of its kind in the world, as far
as I know. The EEX program was based on a collaboration between startups and
large corporation. The participants of EEX program included corporate employees
36
and startup entrepreneurs. The program’s functional unit was Advisory Board (AB)
and there were several of them. In the first pilot round (2014-2015) there were 6
and in the second round (2015-2016) there were eight different ABs. During 20152016 altogether 48 participants joined the EEX program including startup
entrepreneurs and corporate employees. In one AB there were entrepreneur(s) of
one startup and from 3 to 5 corporate employees from different organizations.
It is important to notice the nature of startup. It is not just a small version of large
established organization, but more like a “business search engine” (Peltonen
2016), an organization, which is formed to seek a repeatable and scalable business
model. Thus, it is easy to understand the dynamics and high-speed of the startup
life.
One advisory board consisted of one startup’s entrepreneur(s) and corporate
employees, who each were working in different corporation. Hence, all members
in ABs were unfamiliar with one another in advance. Corporate participants were
first selected by their supervisor or HR-team in their organization, and after this,
the joining to the EEX program was voluntary and thus self-imposed. Furthermore,
the process of selecting and assigning participants to each advisory board was in
the hands of the program leader and the CEO of EEX, Tapio Peltonen. There were
many factors, that influenced in this process. For example, participants’
experience and background, their expectations, startups’ business fields and the
needs of entrepreneurs. The main goal was to form versatile boards, that have
members with different experience, backgrounds, and competencies, which could
be useful to startups. In addition, possible competitive contradictions were tried
to be avoided.
One round was ten-month long. The program started on August, with a kick-off
event, where participants and the entrepreneurs met for the first time, received
some general guidelines, and each advisory board started to work together by
filling up a business model canvas based on their startup’s business. During the
year, participants were working to advice and help the startup and its
entrepreneur(s) the best they knew and could. At the same time participants had
37
the chance to explore startup life in real and concrete way. In the middle off the
program, in January or February, a Joint Event for all participants was held. There
were presentations, group tasks and a chance to meet members from another
advisory boards.
Typically, advisory boards met every month and one meeting took approximately
2,5 to 3 hours depending on how members structured their work. Some guidelines
were given to support the AB work during the program. First of all, every meeting
there should be a chairman and a secretary, selected from corporate employees.
There was a chance to rotate the roles between AB members, if they wanted. It
was instructed to start by filling the business model canvas during the first two
sessions. The reason for this, was to familiarize members with the startups’
business and start the advisory board work effectively. As general guidelines,
Advisory Boards were instructed to set both long-term and short-term targets for
their work, which they should update regularly, to give feedback frankly, and
reflect their progress. In addition, it was recommended to arrange meeting(s)
without the entrepreneur(s), to set tentative themes for the meetings, and to
meet informally, outside the full-AB meetings.
Part of the EEX program was also Peer-to-Peer (P2P) -evaluation rounds, which
were organized twice in the beginning and in end of the program. The evaluation
was a web-based and somewhat similar to so called 360-degree survey, where
every member in every advisory board was instructed to give feedback about
one’s AB members, including entrepreneur(s) and also review oneself. As a result,
every member received a personal summary and their had the chance to compare
their own evaluation to the feedback other members gave to them in that same
advisory board.
Due to the novelty of the EEX program, it has been developed continuously.
Participants and entrepreneurs had an important part as they provided feedback
and suggestions for improvements throughout the program.
38
3.3. Data collection
This chapter describes, how the data was collected. First the supplementary
material derived from the P2P-evaluation, the advisory board observations and
the February Joint Event of all the participants and entrepreneurs of the EEX
program are represented more closely. Later the interviews and the used critical
incident technique is elaborated.
3.3.1. Supplementary material
I started working in EEX program in October 2015. I was hired to organize the first
P2P-evaluation round for all EEX participants. This was a web-based and
somewhat similar to so called 360-degree survey, where every member in every
advisory board was instructed to give feedback about one’s AB members,
including entrepreneur(s) and also review oneself. As an example in one advisory
board one member first reviewed her/himself and then gave feedback to all other
members in that advisory board including entrepreneur(s). As a result, every
member received a personal summary and their had the chance to compare their
own evaluation with the feedback from their peers in their advisory board. In
addition, I analyzed and interpreted the feedback and represented the results in a
brief summary report, which was given to all participants.
As a part of the EEX program, I had the opportunity to participate few advisory
board meetings between December 2015 and January 2016. In order to
understand better of how members work in advisory boards, I observed three
different AB meetings before the interviews. In these meetings my role was an
observer, who made notes, and I did not participate the work of the board.
Furthermore, and also part of the program, in February 2016 a half-day Joint Event
was organized for all participants and entrepreneurs. Mr. Petteri Nykky, who
coached Finnish national floorball team (2004-2010), started the event with his
presentation of how to build a championship winning national team from the top
players of local teams. After this presentation, participants were divided to groups
39
of 3 to 5 persons, so that there were no same advisory board members in the same
group. Every group had its own task, considering either 1) the role of AB –
compared to that of the Board of Directors and that of Top Management Team, 2)
strategy work and its differences between startups and corporation, or 3) the
similarities and differences between corporate leader and startup entrepreneur
as leaders. Groups represented their findings, which were followed by a spirited
discussion.
I had a chance to participate the designing of the group tasks together with the
EEX team. During the event my role was again mostly to observe and make notes,
especially from the group tasks, of which the third one was closely related to this
thesis. In addition, I challenged and supported the groups in their work by asking
supportive questions.
Supplementary material from P2P-evaluation round, direct observations and
participation in the Joint Event gave me insights and prepared me for the
interviews and enabled discussions in a deeper level with the interviewees. First
the P2P – evaluation round provided me with good overall impression of the mood
and effectiveness of advisory boards and the participants, while the observations
from the meetings enhanced my practical understanding and helped to make
sense of the findings from the P2P evaluation.
Through these observations I realized that the ABs can vary a lot and also the
entrepreneurs were different. Every startup created its own context with different
challenges, which then affected on the way how AB works. Finally, the Joint Event
“expanded my thinking” by providing different perspectives to examine the topic
of entrepreneurial leadership and how the participants had experienced the EEX
program until that moment.
The data collected from P2P-evaluation, AB observations or Joint Event, is not used
to answer the actual research questions. However, it created prerequisite
knowledge and understanding for the later data collection through interviews.
Hence, it was important information for the whole thesis project.
40
3.3.2. Interviews - critical incident technique
Interviews were arranged during the February and March 2016, approximately in
the middle of the EEX program, approximately six months after the beginning.
One interviewee was chosen from every advisory board so that they represent
both genders and employees from different corporations. No one had previous
experience working as an entrepreneur nor they had had training programs on
entrepreneurship. Three of the interviewees had family member working as a
small company entrepreneur. However, everyone had been in several different
leadership and management trainings before the EEX program and they worked
as a managerial position at least some years. Two of the eight interviewees did not
have subordinates at the time they were interviewed.
Every interview was started by describing briefly this thesis project - its topic and
aims to the interviewees. The critical incident -method and the importance of their
own subjective experience, concrete examples and real situations were described.
The atmosphere in interviews was relaxed and open, and it seemed that
interviewees spoked freely without additional tensions. Instead of just question
and answer -type of interviews, the discussions felt more like flowing
conversations.
Interviews were retrospective, semi-structured and focused on the events that
happened during the EEX program over the previous six months. Challenging,
successful and/or otherwise emotionally loaded incidents were of particular
interest. The language used in the interviews was Finnish and every interview was
recorded, no notes were taken. The average length of one interview was
approximately 80 minutes, all ranging from 71 minutes to 101 minutes.
The frame of the interviews is presented in the Appendix 1. The frame originated
from several discussions between the researcher and supervisor, and was slightly
iterated after the first interview. The purpose behind this frame of questions was
to help the interviewees to find easier those meaningful and critical incidents. In
41
that sense situations related to decision-making, interaction, challenges and
successes were seen as possible triggers to better remember the critical and
important incidents. Due the semi-structured nature of the interviews, additional,
follow-up questions were asked.
3.4. Data analysis
This section describes the data analysis of this research. This research is based on
EEX program and within this program to its eight advisory boards and their
members. The primary research data consists of eight interviews, which were
conducted in the middle of EEX program, approximately six months after the start,
in February and March 2016. All together eight corporate employee participants
were interviewed, one participant from every advisory boards. For more detailed
descriptions of interviews see chapter 3.3.1.
First the recorded interviews were transcribed (SAGE, Kowal et al. 2014). The
actual analysis was started by getting familiar with the data. I red through the
interviews and categorized the data in wide topics, which were expectations,
challenges, successes and learning outcomes. (SAGE, Willig 2014) Using to this
categorization I then wrote case descriptions of each participant’s experience in
EEX program (see. Appendix 2.) The point here, was to describe and capture the
meaning of their experiences and development in more accessible way. The
descriptions were sent to the interviewees to allow their reflections and for their
comments, specifically asking for their comments on how the descriptions
matched their experience. By this step of analysis, the first research question
about participants’ motives and expectations, was answered.
After writing the descriptions, the process continued with deeper content analysis
in order to answer the latter research questions about the perceptions and critical
experiences. Examples of the analyzing process are represented in the Figures 4
and 5. First, the important factors and attributes required of successful
entrepreneur and running a successful startup were coded. There were all
42
together 271 codes, which were connected to entrepreneurship. This was
followed by a process, in which the factors and descriptions of leadership and its
requirements were coded. This resulted leadership 127 codes, which in some parts
overlapped with the codes of entrepreneurship. While marking the code, a short
interpretation was added.
Finally, important, surprising, confusing, frustrating or other way meaningful
incidents and events were coded. This resulted all together 204 critical incidents.
The coding of critical incidents was the most difficult part due the rich data set and
required certain care. In order to distinguish critical incidents from the data, their
marking was based on the subjective (e.g. interviewee used “I” instead of “we”)
and reflective nature of the experiences, events and conclusions. In addition,
those typically included some emotional loading e.g. “sometimes it has been like,
frustration on behalf of the entrepreneur, when the things are not going
forward…”. While marking the critical incidents, a short interpretation and
comments were also added.
Figure 4. Analyzing processes of entrepreneurship and leadership – codes
43
Figure 5. Analysis of critical incidents.
These were further categorized under wider themes, which arose from the data.
Accordingly, entrepreneurship was classified under four themes, which were 1)
personal traits, 2) features of startup, 3) challenges and 4) consequences.
Leadership was classified under five themes, which were 1) vision, 2) action, 3)
interaction and social communication, 4) personal traits and skills, and 5) powerresponsibility. Critical incidents were categorized also in four themes. These were
1) focus in actions, 2) strategy and business, 3) features of entrepreneurs and
startups and 4) the structure of advisory board. Through the categorizations the
underlying connections between different themes, experiences and reflections
started to emerge. The analysis was an iterative process.
Since the language of the interviews were Finnish, it seemed natural to use Finnish
also in the transcriptions. Hence, the case descriptions and quotations used in the
results chapter are translations of the researcher.
In the next chapter, the results based on this analysis are reported.
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4 Results
The eight descriptions of interviews are represented in Appendix 2. They illustrate
the participants’ overall experience and the critical incidents they have
experienced during the EEX program. To answer the research questions
accordingly, the results are represented in the following categories:
1) motivations and expectations, which describes in more detail what were the
expectations and motivations to join in the EEX program,
2) perceptions of entrepreneurship and leadership, which examines more closely,
what were the perceptions of both and were there any changes in those, and
3) critical learning experiences, where the results are elaborated according to the
critical incidents that the participants experienced and reflected.
4.1. Motivations and expectations of corporate
employees
In order to understand the whole EEX process and its meaning to the participants,
we need to consider the expectations and motivation, why people wanted to join
in the program in the first place.
One of the main reasons why people wanted to participate to the program was
their motivation to help, in this case the startups and to see if they have some
valuable knowledge and skills that could boost the startup forward. This was
interesting to find that people who have tight schedules and who work hard are
still willing to use their time and energy to help and contribute in order to foster
startup’s business.
Another significant reason to join in the EXX program was curiosity. Since no one
of the interviewed participants had an own experience from startup life before the
program, they wanted to widen their point of view by learning what is startup life
in practice. This is an important starting point for any kind of development or
45
learning process, as many learning theories also suggest. In addition, in some of
the corporations it was already announced at the strategic level that they wanted
to enhance co-work with startups. In these cases, participants hoped that EEX
program would offer firsthand experience and knowledge of startup scene, which
further would help them to build effective co-work possibilities.
As a result, all of the interviewees were from the beginning well-motivated and
even excited about joining the EEX program. They wanted to help and experience
the startup life more closely and more realistic. In addition, there was also
willingness to learn and see, how participating the program can benefit their
personal development. This can be considered as positive starting point for any
kind of learning.
4.2. Perceptions of entrepreneurship and leadership
During the program participant’s understanding of entrepreneurship deepened,
got more concrete and their preconceptions strengthened. At the same time, it
was more difficult for them to point out and reflect, how exactly their leadership
skills developed.
In general, participants described successful startup entrepreneur as committed,
hard-working, practical, relentless, passionate and responsible. (S)he has a good
ability to take risks, handle pressures, sell and perform, and has courage to face
uncertain and uncomfortable situations, a certain level of expertise and (s)he can
make decisions and change the course of action very quickly, if necessary. The way
participants talk about the entrepreneurs express also an appreciation of hardwork, courage and commitment that entrepreneurs have:
“In my opinion, you just cannot be a guy who gives up, like I mean at all, and a big
respect for those, who will start that.” (Case 5. MV)
“Dauntlessly throwing oneself into something you believe in, without knowing if
you have money next week.” (Case 3. PU)
46
In the heart of startup, there is very often something new and different e.g.
product, service or solution, which is somehow unique, often innovative, and
differs from other products, services or solutions on the market. The other
business functions and required actions, such as logistics, finance, marketing, are
then built around this heart. In addition, startups were seen as dynamic, they had
the ability to be flexible and agile in their actions and decision-making.
Participants understood the benefits of startup-like dynamic action and pointed
out both lack of it and need for it also in large corporations.
“In big corporations, it should be more adaptively seen its parts and be able to
create and enable different play rules…this kind of big corporation should also
create possibilities to build this kind of small units, where ideas could faster change
from another, course could quickly shift and so find the thing that might even
work…” (Case 7. UH)
In order to enhance their business, the entrepreneurs needed proactively meet
new customers and find solutions, which are innovative and customer-oriented.
This way entrepreneurs are required to think outside the box and regularly cross
the limits out of their comfort zone.
Our entrepreneurs… they just don’t think whom there are talking to, or presenting
their products whether it is a big chief of HR or whatever, they just go, talk,
represent and are confident. (Case 2. JU)
”..in my opinion, above all, they go through a lot of customers’ needs and that way
start to develop those, I think is something to be admired of…” (Case 3. PU talking
about innovations)
All participants connected entrepreneurship with pro-activeness, innovativeness
and readiness to take risks. While pro-activity and innovativeness were seen more
as typical actions and orientation of startups, risk-taking propensity was seen as
individual’s ability to handle pressure and “put it all in”.
“…in my mind, it is linked, when your own home is mortgaged to the project, it
describes pretty adequately the ability to take risks.” (Case 8. ME)
47
Participants had many descriptions for leadership. This was not a surprise,
considering their experience in managerial positions often for years. In general,
leadership was seen as skills and competencies, which help to interact with
subordinates and team members. In addition, leadership – interaction, actions and
decisions is guided by the organization’s vision.
According to participants, leadership is based on organizational culture and
individuals’ self-knowledge. They highlighted the importance of knowing yourself
in order to interact and influence effectively to others. It is obvious that leadership
is connected to the context and organizational culture, which also defines and
shapes the processes and actions.
”All starts, in my point of view, from that you know yourself and what kind of
person you are, and then you can turn that, into leadership, so that you can find
your weaknesses and develop those and your strengths and utilized those.” (Case
1. NI)
“However, everything is based on the culture of organization, whether it is a
startup or bigger, stock-listed corporation.” (Case 8. ME)
Many important features of leaders were mentioned. Leaders need to be able e.g.
to create trustful atmosphere, facilitate and support employees and their actions,
show commitment and presence, listen and pay attention to one’s subordinates,
and share power and responsibility. However, two most important features
related to leadership were a vision and a team. Participants emphasized the
importance of a vision and a skillful team, who works towards the vision together.
”…regarding to leader, (s)he has to be able to build right kind of team with right
kind of expertise…which will work it forward…” (Case 3. PU)
“It is simple, everyone needs to understand where we are going… and it has to
made crystal clear to all.”
All interviewees had previous experience from managerial position and first, it
seemed relatively difficult to point out how exactly they leadership skills had
48
developed, also noting that the kind of higher-level learning is a gradually process,
which inevitably requires time.
” When you already have long career behind, so I think, that it [leaders’ further
development] does not come overnight.” (Case 3. PU)
However, after a deeper analysis and research’s interpretation, the results
indicate that leadership developed through enhanced strategic understanding,
advisory board work and tutoring entrepreneurs as leaders. In the next chapter,
these are elaborated more closely.
4.3. Critical learning experiences
It was difficult to point out that there are some exact learning outcomes that
joining in EEX program resulted, however, after a deeper analysis four bigger areas
of impact arose from the data. These were 1) working with limited resources, 2)
strategizing in startup context, 3) ambiguity of the advisory board work and 4)
supporting leadership development of the entrepreneurs. All these were
considered as remarkable opportunities to learn. Next these themes are
elaborated in more detail.
4.3.1. Working with limited resources
According the interviewees every startup faced one or more bigger challenges,
which shaped their advisory board work. These were for example financial issues,
pricing, internationalization, leadership issues and the lack of clear vision. Through
these challenges participants had the chance to use their knowledge and their
previous experience and in addition, to learn from other participants’ experiences.
These challenges highlighted and made concrete the resource limitations.
Financial situation was a surprise, the startup’s life was more hectic than what was
expected and the cash could run out in short time. Everyone experienced this
somewhat surprising, even though they knew that the speed of startups is fast, it
49
was still a surprise that it really is that fast. Like in the Case 3, that moment, when
the entrepreneur told that there is a one-month time, before they run out of cash
unless the deal at hand was closed, PU really understood the difference between
corporations and startups. Also PA was astonished, when she realized the actual
financial situation in the startup, after seeing the financial statement:
“They had tight financial situation, but I just noted that I really did not realized that
so tight. (Case 6. PA)
The lack of financial resources was a reason, why many of the startups faced so
called “survival mode”. In this mode entrepreneurs were forced to squirrel around
in the hope of cash flow and there were no clear vision or direction. In addition,
entrepreneurs were too busy to survive and they lacked the time and/or energy
to be proactive and focus on the future. The squirreling around resulted many
unfinished, half-ready tasks, plans and visions. This could be described as a
“vicious cycle”, because without a vision and a roadmap it is difficult to improve
the financial situation in a long run.
”I have had the impression that in startups, they rush in many directions, and so
they didn’t find the bean, let’s go there…it was one of the things that was
confirmed, cause they [entrepreneurs], at that one point, were also half-ready to
every direction.” (Case 5. MV)
“We haven’t reach to that proactive point, there haven’t been enough cash flow,
so that it would be possible to think, that we could proactively do some choices, so
that in the future thing would go better.“ (Case 7. UH)
As a result, the importance of sales became evident and concrete. All other key
business functions were connected to sales and obviously, without sufficient cash
flow organizations of any size will bankrupt eventually. Hence, it is not surprising,
that participants highlighted the importance of sales as an ability and an action of
entrepreneurs. They also connected the importance of sale in their own work.
” It is also important in my work as well as in entrepreneur’s, that I meet customers
and sell.” (Case 6. PA)
50
“I still need to put more effort on sales, and then, leave aside other person’s
problems and note, that those are not really my problems” (Case 8. ME)
And furthermore to “measuring the time spend in a project vs. its revenue”.
“How much time you can give to someone to manage or sell something, like in
practice, it doesn’t matter if you made the deal, but the project is already on red,
because you used that much of time… It is something that we could improve here
quite lot, and so I could say it is an outcome that I could already deploy to our daily
basis.” (Case 7. UH)
In startups limited resources required continuous evaluation and questioning,
whether or not the focus was on right things. It was typical and part of the
dynamics of the startups, that the following pattern was used: test – evaluate –
change – repeat. This enabled flexibility and fast changes in the direction, while in
large corporations, existing business, bureaucracy and internal processes take
time and make it slow. The dynamic nature of doing things was highlighted as an
important and desirable ability for larger organizations as well.
“The dynamics of the startup and how it is working, well, it is admirable, the way
it is going forward… we ain’t gonna be a startup, that is quite obvious, but we could
still have some startup-like ways of working, which we could use and in that way
get more speed to our own organizations and to the whole corporation.” (Case 3.
PU)
In addition, experiencing the reality of limited resources resulted the improved
focus of participants’ own work and time. Many of the interviewees described,
how they started to think and question, if they are focusing on the right things in
their work.
”I cannot say only one thing, but in general it has brought this kind of, in my case
for example, I have started to think, do I concentrate on right things in my job and
then I have discussed with my subordinates, if they concentrate on right things in
their job, and trying to ensure that.” (Case 8. ME)
51
Summarizing, the well-educated, experienced and knowledgeable participants
were often taken by surprise by the realities of startup life. They knew well a lot in
theory, but first-hand experience still offered enlightenment. One key learning
was understanding of the tricky balancing act between the efforts to concentrate
on startup’s future and ensure day-to-day survival and prioritizing the tasks for
each moment. Particular highlights mentioned were the importance of sales and
the improved focus in their own work.
4.3.2. Strategizing in startup context
Limited resources and strategy work are closely intertwined, especially through
the vision and decision-making. Participants emphasized the practical importance
of vision to any organization as well as its role in leadership. Despite the different
situations and challenges between startups, every advisory board worked with the
startups’ visions trying to make those clearer and compact. A vision and a direction
was needed in order to understand what was the core of the startup’s business
and also its brand image, identity or narrative.
“Well, there is one, which is somewhere in the distance, but how their actions and
products correspond to its actualization, so if I use this kind of trend word such
narrative, then its development is kind of in the half way.” (Case 4. IA)
Vision was essential for knowing where to focus and what actions should be
prioritized, but if the resources were limited it could easily trigger the somewhat
vicious cycle or survival mode, which were already elaborated in the previous
chapter (6.3.1.)
”It can be the little things that define whether or not the firm will succeed…right
strings and pieces in your hands and then your working needs to be focused, those
are the things that matter, those are critical, I haven’t even understood how critical
they are.” (Case 1. NI)
52
Typically, the way vision is created in startups can be a result of planning, actions
and experiences, in which case the vision has typically developed step by step
while startup has learned by doing, or as a combination of both.
“Now it is rather shaped there, partly as a result of their own creation, and partly
as a result of their successes…then we have noticed these branches in the vision,
which we were able to cut out.“ (Case 7. UH)
The startups’ challenges in different business functions, such as pricing logic,
internationalization and marketing, forced advisory boards to ponder different
options and solutions, to try these solutions and further evaluate, change and to
try again modified or different solutions based on the resources at hand and the
feedback, that the entrepreneurs received from customers.
We will continue its [the model of pricing] development, of course we hear all the
time their experiences about that, when they have spoken with the customers and
received feedback, we continue its development based on that feedback then.
(Case 4. IA)
In order to move forward and towards the startups’ visions, decisions had to be
made. When the resources were scarce, it was necessity to ask, what is the
smartest thing to do here, what should be prioritized and where the focus should
be, still maintaining the direction towards the vision. In addition, remembering the
fast and dynamic nature of startup life, the decisions and possible changes in the
direction needed to happen relatively quickly. This is strategy work as its rawest immediate, intensive and compact.
”How they determine the prices of their products, that is something that we have
worked from the very beginning… their perceptions on, which products are
important and others things have changed so much, that we haven’t yet found the
final solution, what would be the success story… that is still in the progress.” (Case
7. UH)
”...to have heart in that, if you don’t believe in that solutions, so why should I try
to push it through. Maybe it is the courage to stop playing… and the perspective
53
that what will I do if those would be my money, do I believe in the payback.” (Case
5. MV)
It appears that experiencing startup life provided an opportunity to understand
strategically the big picture of the organization, its smaller parts and how all these
are connected to different substantive business functions. Participants had the
chance to work on real startups’ challenges and dig out the problem and identify
the key questions. When asked, what they consider as a success during the EEX
program so far, many interviewees mentioned the ability to address the right
questions
“…we try to build the company in the longer term, so mainly the differentiation of
essential questions…” (Case 4. IA)
As a summary, the challenging situations in startups required participants to
evaluate and refer the advice and decisions always to the strategy and vision of
the startup, when at the same time the strategy and vision was in the process of
making. Hence, this indicates that the participants’ perspective and understanding
of strategy work expanded.
4.3.3. Ambiguity of the Advisory Board work
In the beginning of the EEX program, advisory boards received deliberately limited
guidelines of how advisory boards should manage their work. The given guidelines
considered a formal meeting routines, such as selecting dates well in advance, a
chairman and a secretary for every meeting or predetermined period and making
a minutes from every meeting, starting the first meeting by filling up a business
model canvas, which was started already at the Kick-off in August 2015, and in
general suggestions, that members ought to start the whole program as openminded, without any biases from previous experiences. Otherwise, the agendas
and topics chosen to the meetings were in the hands of the advisory boards. The
lack of predetermined structure resulted both positive and negative feedback
54
from the participants. Despite the negative feedback (was mainly received in P2Pevaluation), it seemed that the lack of strict structure had positive outcomes.
“Some structure to follow, some path that we take as an AB, and in which this
startup has also committed, that these are the things you should go through and
that way, you would get like broad-based, proper cross-section from the whole
startup.” (Case 7. UH)
Interviewees described that one of the motivation factors to join in the EEX
program was their will to be useful and to help the startups and the entrepreneurs
(see chapter 6.1.). This as a baseline, it was quite natural, that they also had a will
and they were aiming for effective and productive working in advisory boards.
Together the will to be useful and non-structured AB work obliged participants to
take responsibility of their role and contribution in the AB, especially in the
beginning of the program, and required to find and learn best practices to work as
an AB. Most likely this differed from the outcomes that pre-structured AB work
would have caused. In the program there were eight different advisory boards,
which varied e.g. in the formal meeting routines, while seven AB used chairman,
secretary and did minutes after the meeting, one AB group did not follow this
policy, the way agendas were prepared, the meeting cycle, and as one of the ABs
discussed regularly without the entrepreneur (see. Case 1. NI), some ABs had tried
it and some not.
“You define by yourself, which are the essential things, and it is good, because then
you have to think yourself, and you are not given some [pre-determined] role,
instead you have to think yourself, how you can contribute, how you can learn, and
so on… I think is rather good… you have to figure out how you can create additional
value to this…” (Case 4. IA)
While asked what would the interviewees wanted to do differently or change if
they could go back in time, everyone said that they would wanted to start to work
faster and more effectively with those “hot topics or critical issues” that the
startup was facing. This also indicated participants’ level of commitment, and their
will to help as well as their high expectations and requirements from themselves
55
and from the AB. In other words, not taking the easy way out, but instead asking
and constructively questioning the actions and decisions made by entrepreneur
and AB.
” I think I would have started earlier to work with the investor problem, when it did
not come out in the beginning…” (Case 8. ME)
“It should have, earlier in the program, to go through the practices how we work
and what is our role and so, that conversation we should have started earlier.”
(Case 1. NI)
The members, who were chosen to particular advisory boards, did not know each
other in advance. After becoming acquainted, members started to know each
other’s’ background, experiences and strengths. Interviewees told that it was
interesting, broadened one' perspective and hence, were beneficial for AB work,
that the members came from different backgrounds. This situation provided an
opportunity for networking and to learn from other members’ experiences and
knowledge.
“Our AB has formed quite good, every member is a bit different and with different
background, which in my opinion has certainly enriched our working.” (Case 8. ME)
”It has been also a great thing - networking with other members, even though the
startup and the entrepreneurs are in the center, of course, but it is interesting to
broad one’s network also in that sense.” (Case 2. JU)
According to the participants the atmosphere in Advisory Board meetings were
open, honest and informal, where everyone had the chance to share one’s
opinions and ideas. This informal nature of the meetings enabled a certain liberty
to throw ideas and to speak more freely. As advisory board’s main function was to
advice, and hence the AB was not directly responsible of the startup’s business
success, like for example a board of directors would have been, made the
communication more effective. It seemed, that the lack of formal responsibility
and profit targets, made it easier to participants to contribute in AB work.
Interviewees described that the contributions between different AB members
56
were in balance at the time interviews were held. However, it took time before
the balance was reached and the members found their roles.
“Well, it is an advisory board, in that sense, we don’t have the power to decide over
the entrepreneur… In that way, maybe this AB is easier than a proper board of
directors, because then… we would need to think more carefully, what is the power
of CEO and which are the things that (s)he can decide, and which are the
responsibilities of the board…” (Case 3. PU)
”Everyone take part in conversations, it not like one person’s monolog, but rather
everyone’s contribution is pretty even, of course, one knows something and
another one something else… a bit generalizing, everyone has a clear right for
their participation…” (Case 8. ME)
In order to still improve the efficiency of their work in advisory boards and get the
most of it, some interviewees requested entrepreneurs to e.g. send agendas well
in advance for the meetings or to give homework. For some entrepreneurs, this
seemed as a challenge first.
“First, it was a challenge to get the entrepreneur send the agendas beforehand, so
in my opinion, (s)he thought that it was enough that (s)he is there and gives just
an update to us. Well, after all, in order to get something out of us…we said that
we need…we were asking that is there some matters in the next meeting that you
want to discuss with us, that we could be prepared better… well, it was one
challenge in the beginning. There were few meetings before…” (Case 3. PU)
On the other hand, two of the eight interviewees felt somewhat insecure before
they were able to give their full contribution to AB work due to the differences in
expertise between other members.
“Well, maybe some courage to bring my own opinion, even, when I am not at my
comfort zone. Maybe those issues have been like… I seemed to me that HR-people
have more to give than I have, so that is it relevant to bring my opinion or not… or
is the expertise find in there, maybe I have thought so… let them tell more and take
57
responsibility, but well, I think it hardly haven’t been bad to say my opinion as
well.” Case 2. JU)
”…if I think about it in my perspective, when there are persons in the board, who
have done real business all except me actually, well before you have the courage
to open your mouth and speak up for example how to build some pricing model,
well it took time a bit and maybe you didn’t express strong opinions due to ‘well,
there are more capable persons here’…” (Case 4. IA)
However, during the time of the interviews, IA seemed to find his place and role
in the AB, while during the interview JU reflected the situation and figured out a
way to contribute and use his expertise more. The open and friendly atmosphere
supported and made it easier to contribute.
“Group dynamics, luckily it has been just…, that if you say something the reaction
is not like in some online forum… everything is taken under consideration, really
nice group and nice atmosphere, which is just aiming to create some additional
value to the work. And well, you also learn yourself.” (Case 4. IA)
”Actually, it might be my inefficiency, that I haven’t asked for it [financial
statement]…I think I will ask to see it. I can pick up some things from there, because
I have used to it, and then ask some questions.” (Case 2. JU)
As a summary, the responsibility that participants’ needed to take in order to make
the advisory board work effective had many positive outcomes, including building
a team, its practices and growing along with it and networking as well as learning
from others.
4.3.4. Supporting leadership development of the entrepreneurs
In general, an entrepreneur needs to handle everything that is related to startup’s
business. All the business functions that in larger organizations are divided to
different departments, an entrepreneur needs to handle by her/himself partly due
to the limited resources. Hence, an entrepreneur has typically lot in her/his hands.
58
While the startup grows, it become eventually essential to recruit more people,
which in turn requires entrepreneurs to think also about their leadership skills.
Interviewees highlighted the need for an effective team in startups. Team
members with right substance knowledge and talents, such as marketing or
technical expertise and with entrepreneurial mindset including e.g. proactivity,
become important, when the startups grow. However, it may not be evident that
sharing the responsibilities and power, would be easy for the entrepreneur, while
(s)he is used to handle everything by her/himself. As the corporate employees had
experienced managers and leaders in their own business fields, quite naturally,
they were also able to advice the entrepreneurs in this sector.
“Certainly, I believe, that those advisory boards have something to give for the
entrepreneurs, after all, they are very pragmatic persons, who run these startups.”
(Case 5. MV)
Many interviewees pointed out that as a leader, entrepreneur needs to be able to
delegate tasks and share responsibilities. Not being able to do this may become
an obstacle for growth. Especially, as a startup entrepreneur it was about
balancing between covering all business roles, and taking care of one’s coping,
while the resources were limited.
“The point where there is enough revenue to separate the practical work and
leadership, because no one is superman till the end so that (s)he could do it all.
Yep, I think that is one of those things that we have been able to state.” (Case 5.
MV)
During the EEX program advisory boards faced really difficult situations. For
example, ME in the Case 8. described a challenging situation, when the AB
members told the current CEO and entrepreneurs that they are not the one to run
the startup successfully. On the other hand, UH in Case 7. told about trust issues
between the CEO and the others, which caused further problems in the dynamics
of the startup team and required lot of AB’s support. Also in Case 1. NI and the
59
other advisory board members, suggested entrepreneur to reconsider its main
business.
“...for the leadership perspective, especially, that they have been able to accept
and listen what the group around you is sitting and pondering their core business,
it is not an easy thing either.” (Case 1. NI)
Handling of these challenging situation indicated of participants’ high-level
commitment and willingness to take responsibility. This also provided an
opportunity to the entrepreneurs as leaders to understand their strengths and
weaknesses better and in that way, improve their self-knowledge.
As a conclusion, the importance of the team and sharing the responsibilities were
highlighted. In turn, the challenges ABs faced provided opportunities to
entrepreneurs improve their leadership skills and self-knowledge.
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5 Discussion and conclusion
This chapter discuss the results and their implications. The aim of this study was
to understand what is entrepreneurial leadership and how the it can be developed
during the EEX program. Three research questions were addressed, and those
covered corporate employees’ motivation and expectations, the perceptions of
both entrepreneurship and leadership and changes in those, and further, the
critical experiences, which might affect their learning.
First, the results are discussed, and we tried to answer the question - what it
actually takes to become entrepreneurial leader. Second, the evaluation and
limitations of this study is provided. As a conclusion, the importance of these
results is highlighted and some recommendations for future research is made.
5.1. Becoming an entrepreneurial leader
This chapter describes what is needed to become an entrepreneurial leader based
on the results of this study. First the implications for theory and the framework
are proposed. Second, the practical implications and recommendations for the
EEX program are represented.
5.1.1. Implications for theory
The emergent framework developed and introduced earlier in this thesis (see
Figure 3.) reflected the competencies and traits that entrepreneurial leader
requires. Based on these results, this framework formed a promising start for
further research. However, to complete the framework few improvements are
suggested.
61
Figure 6. Modified framework of entrepreneurial leadership.
The modified framework is represented in the figure 6. First, the shape is changed
to describe the dynamics towards the vision. This change was made because the
importance of practical strategy work was highlighted in the results. The core of
leadership stayed the same, since these elements were required as a base for any
kind of leadership.
However, the distinctive element, that separates “ordinary” leadership and
entrepreneurial leadership is the entrepreneurial drive. This included pro-activity,
innovativeness and risk-taking propensity as one of its elements. These were all
considered as entrepreneurial actions and part of the startup business. In addition,
two other traits that considered important to entrepreneurship were courage and
commitment, which have not emerged from the previous studies. Both of these
could be included to the ability to take risks, since risk-taking requires courage and
partly increases commitment. Based on the results, courage and commitment
deserved to be separately highlighted. Courage was seen as an ability to go out of
one’s comfort zone and face and act in uncertain situation (cf. the difference to
e.g. skydiving). Confidence and believing one’s own thing were related and
overlapping terms which interviewees used, when they talked about the
commitment that entrepreneurs showed to their cause. Both courage and
commitment were desirable features from the perspective of the interviewees,
and thus, the importance of those features in entrepreneurial leadership should
be emphasized.
62
Another area of improvement was the importance of strategy work for
entrepreneurial leader. When vision is needed as a compass heading, strategy
describes the steps required to reach that vision. Even though strategy and vision
were emphasized by the previous studies, its practical importance should be
highlighted even further. While working with the limited resources, focus and
prioritizing became important and concrete for the participants. While prioritizing
forced to limit the possibilities and required better focus in the on-going tasks, it
sharpened the strategic decisions and direction towards the vision. Hence, focus
and prioritizing were added to the sharpened framework of entrepreneurial
leadership.
It should be noted, that as far as I know this was the first time when learning
outcomes at non-entrepreneurs, whom target was not be an entrepreneur at the
end, were studied in entrepreneurial context. As a setting this was complex. Yet
the results indicated the real-life situations in entrepreneurial context provided
opportunities for corporate employees to learn and develop their skills. Even
though they were not the ones who directly faced the startup challenges as an
entrepreneur. This is consistent with the assumption when individuals,
inexperienced in the field of entrepreneurship, undergo critical events, they will
not only learn from the event but also develop their ability to think and act more
entrepreneurial way based on those events (Pittaway, Thorpe 2012, Cope, Watts
2000). However, before generalization from the perspective of EEX program,
further research is required.
Furthermore, the results of this study are consistent with the previous studies
about reflective learning and confirmed the importance of reflection as a part of
higher-level learning process. In a way, it was actually the participation to EEX
program provided one complex critical event or “process”, which then included
several smaller challenges and successes that further deepened corporate
employees’ understanding of the startup life and its cycle. Furthermore, this was
consisted with the previous research about the critical incidents, and provides
63
further validation for its use as a research technique in qualitative studies
(Pittaway, Thorpe 2012, Cope, Watts 2000, Lindh, Thorgren 2015).
5.1.2. Implications for practice
The participants’ perceptions of startup entrepreneurs were clarified, enhanced
and concretized. The way some participant’s talk about the entrepreneurs also
reflected respect and appreciation towards the hard-working attitude and courage
of the entrepreneurs. Participants’ enhanced understanding of entrepreneurship
in practical level may be beneficial in the future, if/when new ways for cooperation
are created. In large corporations, it is an asset to have employees, who actually
understand and know how startups work - employees who know the cultural
differences and are able to work together effectively despite of the differences.
This would definitely enhance the cooperation possibilities, make it faster and
more diverse and further, improve the ability to be innovative and agile in larger
corporations as well, like many scholars have highlighted. (Karol 2015,
Middlebrooks 2015, Kuratko, Hornsby et al. 2015, Leitch, McMullan et al. 2013)
The
results
indicate
that,
while
for
corporate
employees
learning
entrepreneurship was in their focus, they felt that there was not that much of
conscious improvement in leadership skills or they did not focus on that. One of
the reason for this could be that leadership skills are on a “deeper” level, closer to
individuals’ identity, personality and the interactions skills, which further arise
from that base. (Craig L.Pearce 2007) Hence, it may be harder to change these
skills and also notice these changes. It is also possible that changes in leadership
skills happen gradually and that the given timeframe was not sufficient to obtain
the changes. Another reason for this could be that the participants did not
perceive the EEX program as a leadership developmental program, instead they
focused on enhancing their knowledge about startup life due to its novelty to all
participants. However, participants saw that as an advisory board they had a good
opportunity to affect and develop entrepreneurs’ leadership skills and by that way
bring more structure to startup’s processes. They emphasized the importance of
64
sharing leadership – sharing the responsibility and power between other
employees in startup. (see e.g. Gupta et al. 2004)
All startups provided different context with different challenges. Some startups
were at different stages; some were more mature than others as was described in
the case descriptions. Despite all advisory boards worked with the startup’s vision
and strategy, and strategizing in startup context was intensive, compact and part
of everyday work, since every decision required to be put in to perspective of
startup’s vision. The participants highlighted the need of strategy in order to know
when, why and how they work toward the vision. This might have introduced a
new more practical perspective to strategy work, which has been criticized about
its non-concrete nature. (Mankins, Steele 2006, Campbell, Alexander 1997)
Interestingly, a recent study from University of Vaasa suggested that only 13 % of
Finnish executives know the strategy of their organizations (Maury 2016). This
raises questions, how one can act according the organization’s strategy if one does
not know it? How can the decisions about new innovations or partners be made,
if one does not know the direction of the organization?
Working with limited resources gave realistic and concrete perception of startup
life and its cycle. Even though participants knew a lot in theory the practical
experience still provided important insights. As a result, they highlighted the need
of sales and improved focus in their own work. While in large corporations the
bureaucracy and internal processes might bury the connections between sales and
other key functions, in startup those connections are more clear due to the fast
speed and dynamics. Thus, it can provide an overall but simplistic picture of all the
key business functions and their connections, and this way work as a “reminder”
for the participants.
The ambiguity of AB work seemed to have positive effects in team building. Team
members needed to discover their roles in the team and structure their work in
an efficient way, which resulted an informal and convenient atmosphere. It was
easy to take part in the conversation, contribute and thus, learn from other
members’ experiences and ideas. Furthermore, as teams are important units in
65
today’s organization it is an essential ability of a leader to work efficiently in a team
and also facilitate its work (Craig L.Pearce 2007, Rapp, Gilson et al. 2016). The
initial ambiguous setting required and developed teams’ self-management skills
and at the same time it created a rich environment for personal development and
learning.
As a result, it was difficult to point out what have been the level of development
or learning outcomes of the participants. Instead it is argued that the EEX program
offered good opportunities to learn, and thus worked as a trigger for reflective
learning process. However, it was important that the participants were motivated
and they had positive expectations of joining the program. Participants felt curious
and eager to develop their skills, which is a good starting point for learning
entrepreneurial leadership.
5.1.3. Recommendations for the EEX program
This study was conducted as a part of the second round of EEX program, and even
though the outcomes were positive in generally, some practical implications and
recommendations are suggested here in order to improve the program for the
future.
Since, the structure or the lack of structure and strict guidelines resulted both
positive and negative feedback, especially in the beginning, it seemed that the
informal nature of AB work and how it was built, enhanced the members’ team
spirit and tighter it in a positive way. Hence, it is recommended to provide as few
guidelines as possible to maintain the informal nature of the AB meetings.
However, in order to start faster and more effective – entrepreneurs could provide
information package and/or pitch of their startup’s business and a status update
for AB members to explore in advance. This would help the startup to structure
and understand its present situation, and practice the pitch and presentation. In
addition, as one interviewee suggested, it might be efficient to have a few EEX
participants from previous rounds as “tutors” to new advisory boards especially in
66
the beginning of the program. “Tutors” could share their experiences and best
practices and thus, foster the start of AB work.
Interviews provided good opportunity for the corporate employee to reflect and
summarize what have been experienced so far in the EEX program.
An
opportunity to reflect one’s experiences during the program may enhance
participants’ learning. This might be helpful especially from the leadership
development perspective, since the participants’ focus was mainly on learning to
understand entrepreneurship. Providing questions, which stimulate reflection
upon experiences and their personal development, might be useful tools to
improve learning and development in the future.
It is also recommended to continue the research on the EEX program. First, future
research might provide answer to questions that this study has raised and second,
it would certainly help to develop the program itself, gives the chance to
understand it better, and helps to define how to evaluate the program in the
future. Hence, as a setting this program provides very interesting perspectives for
many researchers in social sciences. The detailed suggestions for future research
are represented later (chapter 5.3.).
5.2. Evaluation and limitations of study
In this study data collection and analysis followed the qualitative research
approach. (SAGE Publications 2008) This study is evaluated according to the four
criteria of credibility, transferability, dependability and confirmability suggested by
Lincoln and Guba (1985).
The criteria of credibility refer to the truthfulness or the trustworthiness of the
findings. Lincoln and Guba suggested several techniques, such as prolonged
engagement, triangulation and member checks, to use in order to increase the
probability to establishing credibility of the study. In this thesis researcher spent a
sufficient time within the research context by being part of the EEX team and
familiarizing herself with the team members, organizing the first round of Peer to
peer-evaluation, participating to the Joint Event of participants and
67
entrepreneurs, and observing three Advisory Board meetings. Thus, it can be
stated that the technique of prolonged engagement was used in this study and
therefore, the researcher was able to understand the contexts, build trust with the
EEX team members as well as with the participants and entrepreneurs and thus
overcome the effects of possible misinformation. The technique of triangulation
refers to the use of different sources, methods, investigators, and theories.
(Lincoln, Guba 1985) In this study, different sources were used to get familiarized
with the context as well as the topic itself. There were several discussions with the
EEX team members concerning the program, its challenges and development, as
well as the theories and findings of this study. Both contributing literature and
empirical data were utilized to form a holistic overview of the phenomenon. Also,
some triangulation in methods can be detected, as the descriptions and the
extracts in the results were used. (Lincoln, Guba 1985). According to Lincoln and
Guba the member checks is most crucial technique to establishing credibility. As
part of the analysis, the case descriptions were sent to the interviewees for further
check, comments and reflections in order to verify and validate the researcher’s
interpretations. Since the data used in this study is not limited to one point of view,
it provides a holistic overview of the whole process and thus the credibility of this
study is increased.
Transferability, the second criterion of the evaluation, considers how well the
findings of a particular study can be applied to other situation. Nevertheless, it is
always relative and depends largely on, how much overlapping there are in the
circumstances. (Lincoln, Guba 1985) To ensure the transferability of the study,
researcher need to provide a thick description, which includes an “extensive and
careful description of the time, the place, the context and the culture”, to which
the findings of the study relate. By this way anyone, who wants to apply the study
to another situation, is able to make the judgement of its transferability. (Guba,
Lincoln 1989) In this study the researcher aimed to describe the research project
in dept. The methodology including the description of the EEX program, data
collection and data analysis are represented in the third chapter. In the chapter 4,
the results are described by using extracts to support the analysis made by the
68
researcher. The limitations of this study are also represented as part of this
evaluation chapter (5.2.).
The third factor, dependability, refers to the consistency of the findings and
repeatability of the study. Hence dependability suggests that the methods used
and the decisions made during the research process should be available for
external review, in which the reviewer can examine and understand the factors
that lead to the researcher to the certain interpretations. (Guba, Lincoln 1989)
Guba and Lincoln suggested a technique of dependable audit, which the process
and method decisions are exposed for external review. In this study, all the
changes concerning the process and methods were discussed with the advisor
and/or supervisor of the thesis in order to sustain the dependability. In addition,
the thesis was also reviewed once by a peer during the process.
The final criterion, conformability, refers to the reliability of the findings and
hence, studies the degree of which the researcher’s interests affect the results.
Conformability of the research can be assessed by tracing the data back to its
sources and that the logic behind the interpretation is coherent and leads back to
the data. The technique to evaluate this is called conformability audit. (Lincoln,
Guba 1985) In this study, the process of analysis is described in detail, and the raw
data was transcribed and coded accordingly. The findings and their meanings were
discussed with the advisor and other members of EEX team.
Moreover, it is possible to identify some limitations concerning this study. First,
the selection of participants in the program; the participants were somewhat
individual champions, talented and succeeded in their careers, so their ability and
motivation to develop was high. This may have resulted more positive outcomes
than the “normal” group of employees would have done. However, EEX is not
intended as regular management training and the participants represent well the
deliberately selected target group. Further research would provide more insight
in this matter.
Second, it was noted that the translation of the language from Finnish to English
might cause nuances in interpretations. However, based on the feedback received
69
from the interviewees as a part of the case description checks confirmed that the
researcher’s interpretations were recognizable and correct.
The data was gathered approximately six months after the beginning, in the
middle of the EEX program and considered participants’ experiences so far. A
more comprehensive overview of the participants’ development would have
required more interviews in different times, for example in the beginning, in the
middle and after the program. Unfortunately, this was not possible due to the time
limits of this thesis. However, interviews taken in the middle of the program
resulted up to date – information and interviewees were able to remember well
their experiences.
Due to the semi-structured interview format, the emphasis of the interviews
varied a bit, which may have affected to the results as well as the researcher’s
inexperience of conducting interviews may have done. However, the utilization of
several different sources from different perspectives (interviews, observations,
P2P-evaluation and Joint Event), and versatile analysis enhance the reliability of
the obtained results.
5.3. Conclusions and future research
The purpose of this research was to study how the corporate key talents
experienced the EEX program and how they developed during it. As many scholars
have suggested the need and importance of entrepreneurial mind-set and
leadership in today’s organizations was highlighted also by the results of this
study. Certainly, entrepreneurial leadership is required to respond the fast
changing environment and growing competition. Thus, it is important that we
know how to develop the different factors, traits and elements of entrepreneurial
leadership.
For participants the EEX program provided unique possibilities to learn and
experience, how working with limited resources demand clearer focus and
prioritizing in actions, and how every decision should be made in a relation to
vision and strategy. In addition, the ambiguity of the advisory board work forced
70
to think how the participants can add value and contribute to the work.
Furthermore, supporting entrepreneurs’ leadership skills gave an opportunity to
consider participants’ own views and perception about effective leadership.
In addition, an emergent framework of entrepreneurial leadership was introduced
as an implication for theory. Unlike the previous frameworks of entrepreneurial
leadership, this framework succeeded to distinct entrepreneurial leadership from
ordinary leadership by addressing the entrepreneurial drive as an engine of action.
Action that is beyond the regular management.
As a conclusion, it is suggested that the importance of developing entrepreneurial
leaders in corporations is to acquire more committed and innovative employees,
who can be proactive and have the drive to go beyond the regular, and to create
possibilities for new cooperation practices between large corporations and
startups. It is obvious that not everyone can become an entrepreneur or
corporation cannot transform into startup. For this reason, we need cooperation
that combines the best practices of both sides – corporate and startup. We need
entrepreneurial leaders, who understand the importance of practical strategy
work, are able to make strategic decision related to the vision, appreciate the way
startup entrepreneur work, and thus, are “entrepreneur compatible”. Hopefully in
the future, a sufficient members of entrepreneurial leaders, critical mass can be
reached, and the whole organization can become compatible with entrepreneurs.
This way they can work efficiently with entrepreneurs and foster the cooperation
as equal partners.
“To succeed amidst digitalization and globalization, not all of us need to become
intra- or entrepreneurs, but we will have to learn to work with them and support
them – cast the roles anew. “ (Peltonen 2016)
Like mentioned already the EEX program offers many interesting research topics
and study designs for the future research. As the strategy work and vision was
highlighted, it would be interesting to study how the perceptions of strategy work
and its importance have changed as a result of the EEX experience. Second,
longitudinal research is recommended to understand and measure participants’
71
personal development and learning outcomes, and further, what have been the
consequences of that development in their home organization. In addition, it
would be also interesting to study entrepreneurs’ experiences and development
during the program.
72
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79
Appendix 1. The themes of interviews
General questions:
-
What is your job in your organization?
-
What kind of training / coaching programs you have been involved in the
past?
-
What were the reasons for you to participate in the EEX program and what
were your expectations at the beginning, before the first appointments?
-
What is it like to be involved in the EEX program? Does it meet your
expectations?
Entrepreneurial leadership:
-
How was it like to be working in the advisory board? How would you
describe the actions and atmosphere of the past six months?
-
What have you learned about entrepreneurship during the EEX program?
Has your perception changed? What are the most important features of an
entrepreneur?
-
What have you learned about leadership during the program? Has your
perception changed? What are the most important features of a leader?
-
How would you describe entrepreneurial leadership? What kind of
features or ways of working it includes or requires?
o Have you noticed entrepreneurial leadership kind of actions in the
last six months? Describe those situations.
o How risk-taking propensity, innovativeness and proactivity has
been seen in last six months and what way? Describe those
situations.
o How about vision and influencing others?
-
What have been challenging situations? What issues you were working
with? How have you managed or have you?
-
Where AB and/or entrepreneurs have succeeded?
80
-
How would you describe the interaction and communication in AB? Are
there situations when it has been fluent or challenging?
-
How AB makes decisions or does it? On the other hand, how the
entrepreneur makes decisions?
-
Have there been situations where there were no solutions? What kind of
situations those were and what did you do?
-
Have you noticed anything regard to AB work or the entrepreneur that
would have influenced to your own work?
-
Have you noticed that you think or act differently in some situations in your
home organizations?
81
Appendix 2. Case descriptions
Case 1. NI – rearranging the way, how AB works
There were basically two reasons for NI to participate EEX program. First he
wanted to widen his own knowledge and perspective in startup life and second,
he wanted to see if he was able to help the startup. In addition, he mentioned the
possibilities for networking and learning from other AB members.
In the beginning it was challenging for Advisory Board to find its own role and
effective way of working. NI describes that the focus was to understand what the
startup is actually working on, what is the core business where the startup needs
funding. In the AB meetings entrepreneur was reporting what have been done and
what is the current situation and this continued throughout the first five months.
NI described that the AB sensed that it was not able to help and advice the startup
as much as it would have wanted. As a result, the AB changed its way of working
so that they started to keep meetings via Skype without the entrepreneur and
formed a common opinion or view, what to suggest - what would be the best
solution for startup to move forward.
“Now we have got a different mode as AB, we have taken different role and we
have conversation among AB members without the entrepreneur between the AB
meetings… we form one view so that it is easier to spar the startup, where to go
and how to move forward. It has changed the agendas of the AB meetings and
now we discuss more about the possibilities and options, and as a AB tried to lead
towards those, instead of just listening what the entrepreneur have done. This has
boost the AB work to a new level.”
Another challenging situation that AB faced, was to evaluate startup business
opportunities. After a relatively long consideration, AB decided to suggest a new
direction for the startup. For the entrepreneurs this meant that they might need
to change their core business in order to survive and secure the cash flow.
”We were prepared for it in advance, and, well, in the meeting we brought our
opinion about the possibilities of their business, like with numbers, and thereafter
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we submitted the materials and calculations and our views in written for them to
ponder and then we actually recommended, what they should consider…”
For NI it was hard to mention yet, if there were some learning outcomes related
to the EEX program. However, he noted that this has encouraged to question and
to use more creative thinking, instead of acting and repeating “those normal and
old ways of doing things”.
Case 2. JU – the courage of entrepreneurs
JU decided to participate EEX program, because he wanted to see in more detail
how startups work. He had previous experience in working with small and medium
sized companies, but the practical understanding and knowledge was lacking. In
addition, he also wanted to help.
”It would be totally amazing to see, that this startup just got the boost it needed
in order to grow and succeed and that their product becomes a Finnish export.”
According to JU the first six months have been fun, and the AB group is formed
very well. Sometimes he would have wanted to have more challenges or
“homework” and somehow he also felt that he may have present more proactively
his own area of expertise and help in that scene. JU supposed that it might have
helped, if they have shared more clearly their backgrounds and areas of expertise
between the AB members in the beginning. Nevertheless, AB had been able to
help the startup in many challenges related to business functions, such as
determination of pricing, measuring different sales figures and recruiting. In
addition, members have also provided their own networks and this way the
startup has got e.g. sales leads.
As a result of six months’ period in EEX and AB work, JU had got practical
understanding of the importance and the possibilities of social media in marketing,
had grown his networks and had realized how brave the entrepreneurs are and
they need to be in order to grow their business.
“Our entrepreneurs… they just don’t think whom there are talking to, or presenting
their products whether it is a big chief of HR or whatever, they just go, talk,
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represent and are confident, and I think that is great, I should try to do it more
myself as well… it is maybe the most important lesson, if I could only catch it on.”
Case 3. PU – in order to learn, one has to experience
In PU’s organization it was already stated as a part of the strategy, that the
company wanted to enhance its co-work with startups, but the methods were not
yet to be known. In that sense, EEX program provided both good timing and hands
on experience from startup scene and was the main reason for PU to participate.
In addition, he also wanted to see and experience the dynamics of a startup.
PU described that the past six months in EEX program have been “damn nice”.
There have been a good team and momentum in the AB meetings. For PU it had
been surprising and instructive to notice how important and useful informal
networks can be and that these had open many doors to the entrepreneur. AB
members had also shared their contacts to the entrepreneurs.
“This dynamics, it is something what gives energy also yourself… we meet every
three weeks and so much happens every time between the meetings. Sometimes
it feels we ought to meet more often. Of course the entrepreneur keeps us very well
informed by email if something remarkable happens… So that in that sense, it
almost feels that you are part of the startup, not only a member of advisory board.”
However, there have been many challenges, such as internationalization and in
the beginning it took time, before the AB and entrepreneur found its efficient way
to work together. Especially challenging it was for the entrepreneur to have
sufficient amount of formal structure in the meetings, like sending the agendas in
advance, in order to get the most of the AB members. One of the critical moments
PU described was the financial crisis that the startup had after five months of EEX
program – there was just about over a month, when the entrepreneurs told the
AB, before the cash would have ran out if the startup can’t close the deal. In that
moment the difference between startup and corporation was really clarified and
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concretized and every AB member were truly worried, while the entrepreneur
thought it was “a normal situation”.
After six months in EEX program and experience of intense startup life, PU
described and picked up three important outcomes.
”The dynamic of the startup, courage to approach different parties and use of
networks, also commitment and to trust in your own story.”
PU highlighted the importance to experience the startup life by yourself.
”This is one of those things you have to experience by yourself. It doesn’t matter
how much I talk about it in my organization, of course they (colleagues) listen with
interest, but when you don’t live there along with it, it is not that way, however,
learned.”
Case 4. IA – how to help more effectively Finnish entrepreneurs
In EEX program, IA saw the possibility to get valuable, practical knowledge about
Finnish startups and small companies and their working methods as well as
challenges they face, which directly helped IA in his daily work and on the other
hand he could provide some valuable knowledge about internationalization to the
entrepreneurs.
“So learning process, test laboratory, and of course when I do this work, I want
genuinely help Finnish companies, so bringing my expertise to help the startup to
develop its business.”
In the beginning of the program, IA felt that it was good that there was no strict
structure for AB, members’ roles and how they should work. IA descried that it
was challenging, but “intellectually interesting” when one needs to reflect by
oneself, what is one’s role and how one can actually help. Instead of just following
predefined process and adjusting to that.
In advisory board they soon noticed that there were three bigger challenges
related to startup’s expectations and needs. This became so called “top three”,
which AB had worked with.
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“Well, the pricing was one of those, also this internationalization and its focus
points and then the third one was then related to productizing.“
When asked where AB and entrepreneurs have succeeded, IA highlighted that AB
was able to ask the right questions and hence address the top three of challenges
and how to proceed with those. IA reflected that positive and informal
atmosphere have supported open conversations “little bit like brainstorming”,
where one can also ask “stupid questions”.
“Very nice people, and nice atmosphere, which is exactly aiming at that we try to
create some additional value to this business. And you lean also by yourself, so we
have a good gang.”
For IA it was hard to say, if EEX program have provided any bigger learning
outcomes or critical changes in thinking, more it had enhanced already existing
views and opinions about startup life, entrepreneurship and leadership.
”Well at least it has given understanding about the essential challenges in their
daily business and how we (in my organization) can facilitate and, hopefully, create
circumstances, which are useful to Finnish entrepreneurs… And of course, I have
learned things outside my own expertise, this kind of general, so called common
business knowledge.”
Case 5. MV – experiencing new business field
MV had a background in “somewhat conservative business field”. When he signed
in to EEX program, he did not really know what to expect, but the program
sounded interesting enough, so he thought “why not”. However, he assumed that
startups are more dynamic, the decision are made faster, and that there is a
possibility for networking and learning from others. MV also mentioned the
chance to help the entrepreneur as a one of his motives.
As one of the challenges MV and the advisory board had struggled was related to
startup’s vision and direction. MV described this as one of the critical events. First
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they thought that everything was fine and balanced was found, but suddenly
startup’s direction needed to be change in order to survive. In that moment AB
members from totally different backgrounds rolled out their sleeves and had a
long brainstorming session.
“On the other hand it was fun, but challenging, there were five people from totally
different backgrounds and we are playing there with some other person’s money…
quite fast the situation concretized that we needed to find a solution… well this is
the reason why we are in this program, now we can figure this out together, solve
and create, now we have a real problem.”
This was one of the obstacles the AB struggled through and the balance was
returned. AB had also been able to advice entrepreneurs and question, what are
the most important actions and priorities.
“Although, one of the things that we brought as a AB team, maybe it is little bit
about the leadership as well, but sort of that if you are in a hurry and you are trying
to do everything in everywhere, so then you don’t have anything ready to show to
the customer, so we recommended that maybe they (entrepreneur) should put
some effort to product developed to have a demo, real, concrete product,
something to present… and then they made a video and developed that product
forward…”
As learning outcomes, MV brought up few things. He was surprised by the
dynamics and speed of startup life and cycle, even though he had assumed that it
is fast. Secondly, he was pleased to experience software business, especially in
consumer sector and expected that this might be useful knowledge for him in the
future.
Case 6. PA – broaden perspective to one’s own work
PA had a wide experience in different positions from finance sector. Two main
reasons for her to participate to EEX program, were the opportunity to see what
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is startup life in reality and that way had a chance to develop herself particularly
professionally.
In the beginning PA and also other AB members in her perspective were excited
and thrilled to work with their startup and entrepreneur, and PA felt it was
“instructive and interesting” to see, how other members, from totally different
backgrounds, think and work. Due to the request of entrepreneur, in those first
meetings AB concentrated on clarifying the vision and how to expand and scale up
the business of the startup. However, soon after the first meetings the
entrepreneur told the AB that they had financial difficulties. Due to her
background PA thought that entrepreneur can easily apply for a small loan and
asked to see the balance sheets, when PA realized that startup was fighting for its
survival and had a really bad financial situation. Despite the challenging situation
AB members rolled of their sleeves to find solutions and help the entrepreneur to
move forward.
“They had tight financial situation, but I just noted that I really did not realized that
so tight. We noted together that fine, this is the situation and now we need to
move forward and think what shall we do next. We didn’t grizzle there further, but
we thanked the entrepreneur for telling us, it was a sign of confidence.”
PA describes the atmosphere in AB meetings as a positive and that these meetings
had also been important for the entrepreneur, who called them as a “lifeline”.
However, she was somewhat disappointed that as an AB team they should have
done more in order to help the entrepreneur and sometimes she felt kind of
“powerless”, because the AB did not succeed to overcome the financial problem.
AB had succeeded in finding short-time solutions and with those the startup had
survived. PA told the AB encouraged the entrepreneur to talk to the owners, and
they also started to build a presentation about the startup, something that the
entrepreneur could show to the potential investors.
So far in the program, the challenges had been a lot about funding and
unfortunately with these issues PA worked with every day, so in that sense there
did not happen that much of learning. Nonetheless, she had understood and
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experienced the role of funding from different perspective and also reminded
herself, what is the focus and the most important things in her own work.
“The entrepreneur has some much thing (s)he need to think, like storage,
logistics…the most important is the sales in my opinion, but how many other things
(s)he need to take care of and how small part, actually, funding and financing are
in entrepreneur’s thought even though it really important. “
” It is also important in my work as well as in entrepreneur’s, that I meet customers
and sell.”
Case 7. UH – innovativeness requires co-operation and small and agile units
To UH EEX program sounded really interesting, because the department that he
had led, have been also kind of a divergent in a big corporation, and so their
challenges could be similar to startup’s. Despite the most important reason for
him, was his will to develop himself “now as well as in the future”. He expected to
see different operating cultures and environment, and to be influenced by those
and “of course to bring my own view of doing things”.
In the beginning UH expected more predefined structure from the EEX side and he
assumed that due to the lack of it AB work started to follow entrepreneur’s
agenda. He admitted that AB did not really intervene on that despite its
possibilities due to severe problems the startup had at that moment, which
required AB’s support. There were two bigger challenges that AB had faced related
to leadership and financing. UH described that in the AB meeting the atmosphere
was divided even though they had “a good drive forward”. In startup, there was
a trust issue between the owner/entrepreneur and the startup’s CEO, which
caused the CEO being somewhat paralyzed, when the owner was around. Since
this was noted, the AB members had worked to solve the problem by supporting
the CEO to improve his/her leadership and by having e.g. private discussion with
different parties. By this way AB had contributed to build the trust. UH felt that he
had lot to give in this leadership issue due to his background.
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”I have tried to influence to the owner, from the perspective of leadership, that
(s)he would understand, what mischief (s)he causes by her/his own behavior by
worrying that, of course it is her/his own money that goes down the drain, but it is
an issue, that (s)he has not been able to see, that it might be her/him that actually
affects on that.”
Struggles with financial situation became easier partly due to AB’s support and
guidance of the sales process and sales pitch. As a result, the startup developed a
way to predict its cash flow, sales from the sales leads in their pipeline and in
addition, its sales pitch by changing its perspective from just explaining and
presenting their product and services to find out what is the customer’s problem,
which can be solved by their product or service.
In order to expand his knowledge, UH would have wanted to challenge himself
more with different tasks, such as financing or pricing, which would have been
slightly out of his comfort zone. However, he summarized his learning outcomes
as understanding the need of small and agile units in order to innovate, measuring
the time spend in a project vs. its revenue, and that problems need to be solved
and those cannot be hided.
“Well the first thing, and probably the biggest enlightenment, is that big
corporation needs to be able to innovate and quite big part of it, is the ability to
utilize small companies and startups or to know, how to create these small, agile
units…where there is a chance to think outside the box…”
Case 8. ME – focusing on the right things
ME had a strong background in change management, but at that time ME’s formal
work had some similarities with startups and that motivated him to join in the EEX
program – he felt it could be a good learning point and maybe he could also help
the startup. He told he did not have any big expectations, instead he wanted to
get the overall picture, before making any evaluations.
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ME described that the EEX experience so far had been interesting, AB members
had scheduled their meetings flexibly and the communication had been open and
honest. It had enriched the AB work, that members came from totally different
backgrounds. However, it turned out that the startup had big challenges especially
related to financing and funding, which according to ME were not the ones that
entrepreneur represented in the beginning.
”We knew that there isn’t enough cash flow, but we were told that their financial
situation is sufficient for now, but anyone did not become to ask, how long…
determine how long time is that ‘for now’”
He concluded that the problem is the lack of sales person, who would know how
to sell and for example do the pitching in funding events. This situation culminated
so that AB had told to its entrepreneur that (s)he is not the right CEO for the
startup.
“Well, probably the latest have been most challenging situation for AB - how to tell
the entrepreneur that (s)he is not the right CEO for the startup”
Despite the challenges also concrete progress had been gained.
”Hmmm. In my opinion that investor deck is now in good shape…we have also
recognized the problems and clarified the positioning of their product or service,
which the startup is working with, these have been quite successful cases, which I
believe the entrepreneur has respected, actually, I know (s)he has.”
ME summarized that participating to the EEX program has provided some small
insight from here and there. However, the most valuable outcome for him was the
enhanced need of constructive questioning and improved focus.
”I cannot say only one thing, but in general it has brought this kind of, in my case
for example, I have started to think, do I concentrate on right thing in my job and
then I have discussed with my subordinates, if they concentrate on right things in
their job, and try to ensure that.”
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